Procurement Bill [Lords]

Alicia Kearns Excerpts

2nd reading
Monday 9th January 2023 Commons Chamber

[Alicia Kearns (Rutland and Melton) (Con)]

I welcome much of this Bill, in particular its support for small and medium-sized enterprises, but I wish to focus my comments on national security concerns. Geopolitical and geo-economic competition has upended our traditional supply chains, while the actions of hostile states who are industrialising path dependency require us to think more strategically about public procurement. Equipment used by our police forces, hospitals, Departments and local councils are providing hostile states with a back door into our security and forcing dependency on these malign actors and the states who produce them.

As the Minister rightly pointed out from the Dispatch Box, this Bill gives us the opportunity to meaningfully put resilience at the heart of this Government’s effort. We cannot risk insufficient action now because it will hurt us in the long term, as exfiltration is far more costly and complicated than putting in place the right measures now.

For too long, we have allowed the public sector to outsource basic components that make up our everyday security to companies and countries with malign intent. All of us will recall the debates about stripping Huawei from our 5G telecoms network, which took too long but was the right thing to do. The problem is, we face Huawei-level decisions on a range of security measures and it relies on MPs becoming aware of these companies and this risk for there to be a meaningful debate about it, which cannot be the right way to deal with it.

There are tens of examples that could be raised, whether it is DJI drones, which are used by our police forces across Britain, or Hytera body cameras, which film what police officers can see. The likelihood is that what is seen by every police officer entering the home of a constituent in Rutland and Melton could be sent back to China. The risk is so strong that Motorola has created technology to intercept that technology and prevent the data from being sent back. My priority is protecting the data of British nationals—our faces, our gaits, our walks, how we use our mouths and how we communicate—because China wants this data. That is why it is buying up gay dating apps and why it owns TikTok. It is our data that will allow it to have supremacy over us as we go forward and make us vulnerable. The Chinese Communist party is seeking to build a tech totalitarian state, and that requires the data of those around the world. At the moment, British taxpayers’ data and money is enabling that.

We have to update the rules. Over the weekend, there was a story about tracking devices found hidden within Government cars. Our data is important because it reveals not just the locations we go to in our cars, but our friends and networks, our vulnerabilities, habits and activities, which allows us to be threatened, blackmailed, undermined or tracked. If these cellular IoT nodes—called SIM cards in the media—were duplicitously installed, then that is CCP espionage. It is more likely that these are standard technologies that are installed in all cars. That shows why this Bill is so important, and why we need national security considerations. At the moment, we all have constituents driving around with these cellular IoT modules in their cars; any of those individuals could be pinpointed if they drove near a secure site and were then tracked by the Chinese Government. The Chinese Communist party would then know where they live, how they live their lives and what they do, and they would become vulnerable.

The Chinese Government could quite easily work out who the Prime Minister’s security team is by looking at the cars that travel out of No. 10 and then go back to the Prime Minister’s house all the time. They could then track those security officers to where they are doing recces for future visits, and then they will know where our Prime Minister is travelling to. They could do that to any of us if they wanted to make us vulnerable.

The problem is that 50% of all cellular IoT modules are made by three companies: Quectel, Fibocom and China Mobile. These are three Chinese companies that cannot be trusted. There are alternatives, but businesses are choosing to save pennies on the pound in order to protect their businesses rather than do what is right, which is making sure that small tools such as these modules are removed, thereby protecting the data of British nationals.

There is, without question, a balance to be struck within British procurement. We have to get value for money for taxpayers. However, the purchasing of cheaper equipment—quite often state-subsidised by hostile powers—is a dangerous false economy because it produces that path dependency that I have set out.

When the Cabinet Office last year rightly advised public bodies to sever contracts with Russian and Belarusian suppliers, the lack of legal provisions to do so meant that any meaningful attempt would actually result in a serious breach of UK law. I ask Ministers to rectify that when they look at the Bill.

The flaws in our procurement system severely undermine not only our security at home, but our ability to stand up for human rights around the globe. The Foreign Affairs Committee has found that the same Hikvision cameras that guard our council buildings monitor and enable Uyghur internment camps where we know that genocide is being industrialised. It is morally unacceptable that we choose to use a surveillance system that actively racially profiles Uyghurs within our own systems. It is tantamount to facilitating genocide, because we are funding the Chinese Government and enabling them to continue to do what they do. We know that they are guilty, yet we are saying that we will remove those cameras only from sensitive sites. It should be from all sites, particularly when there are alternatives.

My asks of the Government are as follows. I met with Cabinet Office officials last year, and again this morning with the Parliamentary Secretary, Cabinet Office, my hon. Friend the Member for Brentwood and Ongar (Alex Burghart)—I am grateful for his time—and we need clarification. First, on the debarment list that is created to exclude suppliers from procurement contracts, with a procurement review unit to lead investigations, who will have ministerial discretion over who appears on the list? Will we have proactive powers to hunt down these companies to ensure they are on the list, or are we going to wait for MPs to have the information handed to them so that they can stand up and raise it?

Secondly, we must ensure we do not end up in a relentless whack-a-mole trying to hunt down the companies responsible for such things. We need to focus on the components within sensitive industries or sensitive items, and to ensure that any public body procuring such components or companies within relevant industries must come to someone for a second review. That means we are not attacking a specific country and saying China’s products are bad or saying that certain companies are awful; we are doing due diligence in sensitive areas. That is why we need a SAGE-style committee on public procurement specifically looking at national security.

Thirdly, has the Secretary of State drawn up a list of priority sectors that we can deal with when the Bill passes into law? Finally, what assurances can the Secretary of State provide for how local authorities will be able to check with the Government whether a provider is on the debarment list? At the moment I have local authorities from around the countries writing to me saying, “Alicia Kearns, can you please give me advice on whether or not we as the local council should procure from this company?” That cannot be the way we do this. We must ensure local government is not the entry point for hostile states.

Finally, on supply chains, public authorities need to be able to investigate, and we must ensure that this goes high enough up the chain. Canadian Solar is looking to build a solar plant in my constituency. It sounds lovely—“Canadian Solar? What a great company”—but when we actually look into it, it is GCL-Poly, a Chinese-owned, Chinese-run company that is complicit in Uyghur genocide. We must ensure that the burden to investigate is properly addressed.

On that point about human rights and genocide, I recommend to the Minister that we look at the International Criminal Court’s Rome statute so that, again, we have explicit, grounded-in-law ways in which to determine whether certain countries should not be allowed to provide things to us, so that we are not looking to make complicated determinations of genocide. Again, that is where a SAGE-style committee could come in use.

All in all, I urge the Government to seize the initiative. There is so much we could do on national security that I cannot fit into seven minutes, but my door is open for further discussions. I hope that my speech sets out in brief just some of the asks. This Bill could be transformational for protecting our people and their data in the long term and for protecting our children’s futures.

--- Later in debate ---

[Alex Burghart]

The platform is based on a system that we already have. We are confident that we will be able to introduce it in line with bringing this Bill into force. Obviously, we have to pass the legislation and get Royal Assent, and then there will be a settling-in period. But it is going to be functional very soon.

We are also strengthening exclusion grounds. The Bill toughens the rules to combat modern slavery by allowing suppliers to be excluded when there is evidence of that, accepting that in some jurisdictions it is unlikely that a supplier would ever face conviction. My hon. Friend the Member for Totnes (Anthony Mangnall) made some important points on that score. It is absolutely right that we should be able to debar suppliers who have engaged in such dastardly crimes. It is too soon, however, to say exactly which suppliers are going to be debarred, but he has read the legislation and can see what the potential is. We will consider suppliers according to a prioritisation policy. Once on the list, suppliers will stay on it for up to five years unless they can show that they no longer pose a risk—these are the self-cleaning clauses. Any contracts awarded during an investigation can be terminated if the supplier is debarred. Safeguards are built into the grounds to stop suppliers from renaming themselves. I am happy to talk about those.

[Alicia Kearns]

I thank my hon. Friend for meeting me earlier today. It was enormously appreciated and I thank him for his time. How does he plan to overcome the risk of playing whack-a-mole—business after business being involved and MPs and others being relied on to flag them up? Will the procurement unit be proactive or will we instead focus on components and vulnerable sectors to ensure that we have the protections we need?

[Alex Burghart]

My hon. Friend raises an excellent point, which I was happy to discuss with her earlier. Obviously, the issue is under active consideration. In her speech, she also referenced debarment. I reassure her that the debarment provisions allow for proactive investigations into any supplier or subcontractor and that cases will be selected by the Minister for the Cabinet Office. Selections of cases will be governed by a robust prioritisation policy, which we will set out in due course. The debarment list will be publicly available for all contracting authorities to consult, demonstrating how transparency is at the heart of the Bill.

Value for money is a core component of what we are seeking to achieve. I assure the hon. Member for Birkenhead (Mick Whitley) that buyers will be able to give weight to bids that create jobs and opportunities for communities in the delivery of a contract, supporting and levelling up our objectives. Now that we have left the EU, central Government buyers can reserve competitions for contracts below certain thresholds for suppliers in the UK and/or SMEs and social enterprises only.

I am pushed for time, Madam Deputy Speaker, so allow me to draw my remarks to a close. This key legislation has been made possible only through our having left the European Union. It comes at a time when we have a need for a new procurement policy in this country. I say to the right hon. Member for Ashton-under-Lyne, who made a number of claims about PPE and VIP lanes, that the Bill provides strong safeguards to preserve the integrity of procurement. Equal treatment obligations require that all suppliers participating in the procurement must be treated the same. Additionally, any conflicts of interest should be identified for anyone acting for, or who has an influence on a decision made by or on behalf of, the contracting authority in relation to the procurement. If a conflict of interest puts a supplier at an unfair advantage and if steps to mitigate that cannot prevent that advantage, the supplier must be excluded. Furthermore, the direct award provisions have clear and narrow parameters for use. They include a new obligation to publish a transparency notice before making a direct award and maintain obligations to publish contract details once awarded.

This Government are absolutely committed to integrity, transparency, value for money and delivering for the British people. This Bill will make a difference to our procuring authorities, to our public services and to our taxpayers. It is good for our authorities, our taxpayers and our local communities, and it is good for our country. I commend the Bill to the House.

Question put and agreed to.

Bill accordingly read a Second time.

PROCUREMENT BILL [LORDS] (PROGRAMME)

Motion made, and Question put forthwith (Standing Order No. 83A(7)),

That the following provisions shall apply to the Procurement Bill [Lords]:

Committal

(1) The Bill shall be committed to a Public Bill Committee.

Proceedings in Public Bill Committee

(2) Proceedings in the Public Bill Committee shall (so far as not previously concluded) be brought to a conclusion on Thursday 23 February 2023.

(3) The Public Bill Committee shall have leave to sit twice on the first day on which it meets.

Consideration and Third Reading

(4) Proceedings on Consideration shall (so far as not previously concluded) be brought to a conclusion one hour before the moment of interruption on the day on which those proceedings are commenced.

(5) Proceedings on Third Reading shall (so far as not previously concluded) be brought to a conclusion at the moment of interruption on that day.

(6) Standing Order No. 83B (Programming Committees) shall not apply to proceedings on Consideration and Third Reading.

Other proceedings

(7) Any other proceedings on the Bill may be programmed.—(Andrew Stephenson.)

Question agreed to.

PROCUREMENT BILL [LORDS] (MONEY)

King’s recommendation signified.

Motion made, and Question put forthwith (Standing Order No. 52(1)(a)),

That, for the purposes of any Act resulting from the Procurement Bill [Lords], it is expedient to authorise the payment out of money provided by Parliament of:

(a) any expenditure incurred under or by virtue of the Act by a person holding office under His Majesty or by a government department; and

(b) any increase attributable to the Act in the sums payable under or by virtue of any other Act out of money so provided.—(Andrew Stephenson.)

Question agreed to.

SUPPORTED HOUSING (REGULATORY OVERSIGHT) BILL (MONEY)

King’s recommendation signified.

Resolved,

That, for the purposes of any Act resulting from the Supported Housing (Regulatory Oversight) Bill, it is expedient to authorise the payment out of money provided by Parliament of any increase attributable to the Act in the sums payable under any other Act out of money so provided.—(Andrew Stephenson.)