Procurement Bill [Lords]

Debate between Angela Rayner and Stephen Kinnock

2nd reading
Monday 9th January 2023 Commons Chamber

[Angela Rayner (Ashton-under-Lyne) (Lab)]

It is a pleasure to open this debate today on behalf of the Opposition. I pay tribute to the work that has already gone into the Bill in the other place. I know that constructive discussions led to positive amendments, and I hope that they will be accepted and improved as the Bill goes through this House. I was a little pessimistic about that following the Minister’s opening comments, but I hope that we can work constructively with what the other place has recommended. As the Minister says, the Bill is an extremely complicated and large piece of legislation, so I hope that we can do that.

We on the Labour Benches recognise the need for a procurement Bill to consolidate the patchwork of former EU rules and to bring the spaghetti of procurement regulations into one place—a single regime. The Procurement Bill is an opportunity to create a coherent rulebook, with one driving aim: to get value for every single penny of taxpayers’ money. We want to deliver better services that meet the demands of the British public and to unlock the world-leading innovation of the UK economy.

I thank all my hon. Friends and Members from all parts of the House who are here today. When most people hear the word “procurement”, they switch off, but I cannot get enough of it. It is absolutely critical to our economy and to our future national prosperity. It accounts for a third of all public spending—more than the NHS budget and double the education budget. When harnessed for good, the power of procurement can drive up standards, pump money back into the pockets of local communities and businesses, create jobs and skills in our towns and cities, and hand wealth back to the people who built Britain.

I fear that the Bill we have been presented with today could miss those opportunities; that the ambition of the proposals before us will not meet the moment, and will not provide answers to the challenges that we face or learn from the mistakes of the past. As it stands, the Bill is a sticking-plaster solution, allowing taxpayers’ money to line the pockets of the well-connected, those with the deepest pockets and the abundance of experts who know how to navigate the system. I want Britain to lead the world on procurement by driving every penny of taxpayers’ money into our local communities, promoting British businesses up and down the country.

There are, of course, some aspects of the Bill that we welcome—in particular the focus on reducing the burdens currently faced by small businesses. SMEs are the backbone of our economy and the current system just is not working for them. Reform is urgently needed. The British Chamber of Commerce found that SMEs are now receiving a smaller relative amount of direct Government procurement spending than they were five years ago. Small businesses across the country are being choked out of the bidding processes, which are complicated and time-consuming. SMEs are competing for contracts against big corporations that have more form-fillers than the SMEs have workers. I welcome the positive steps taken in this Bill, especially as this Government have repeatedly failed to reach their target for SMEs to benefit from 33% of procurement spend.

That being said, there is not enough in this legislation dealing with late payments for SMEs—a practice that, in the current economic crisis, is killing off too many small enterprises in this country. The Minister talks about the trickle-down effect of 30 days, but I do not believe that will work in this instance. I hope he will address that gap in his closing remarks and engage with us in the Committee to improve the Bill in that regard.

I welcome the changes made in the other place to include social value in the national procurement policy statement, but I was disappointed by the scant mention of social value in the original version of the Bill and in the Minister’s opening comments today. Social value is a tool that makes it easier to give money to local British enterprises creating jobs, skills and green opportunities in their communities. It rewards providers who want to build a better society and contribute to our nation’s prosperity in the long term.

This Bill is an opportunity to make, buy and sell more in Britain. It is a chance to give more public contracts to British companies, big and small, so that contracts do not always automatically go offshore, to the giant corporations with the lowest prices, but to businesses creating local jobs, skills and training, maintaining workers’ rights and trade union access. That is what is important and what the social value elements of this Bill need to promote.

[Stephen Kinnock]

My right hon. Friend is making an excellent speech. Returning to the issue of the three fleet solid support vessels, the MOD contract was awarded to a Spanish-led consortium. That in itself was a deeply disappointing decision, but what is even worse is that the Government are not insisting on legally enforceable guarantees from Navantia, the Spanish company that leads the consortium, that the ships will be built with British steel. Does she agree that it is outrageous that we have three key vessels being built without British steel?

[Angela Rayner]

I absolutely agree with my hon. Friend. As he says, using public money to make, buy and sell more in Britain can also be achieved through our defence spending and by spending on steel and vital infrastructure in the UK. As the party of working people and trade unions, we in Labour know that, when done well, defence procurement strengthens our UK economy and our UK sovereignty, but this Bill fails to direct British defence investment first to British business, with no higher bar set for any decision to buy abroad.

Labour wants to see our equipment designed and built here. That means our national assets, such as the steel industry, our shipyards and our aerospace. That is fundamental for Labour, and we will amend the legislation to secure it. My right hon. Friend the Member for Wentworth and Dearne (John Healey), the shadow Defence Secretary, made it clear that that is a priority for Labour, when he announced at our conference in September that Labour in government would build the navy’s new support ships in Britain.

As my right hon. Friend the Member for Warley (John Spellar) mentioned, the Conservatives announced that the £1.6 billion fleet solid support ship contract would be awarded to Spanish shipbuilders, meaning at least 40% of the value of the work will go abroad. Ministers have confirmed that there is no limit on how many jobs will be created in Spain and that there are no targets for UK steel in the contract. That is frankly a disgrace and a wasted opportunity, when the use of procurement could have been a force for strengthening our UK economy and our security at the same time.

I hope the Minister is listening and will openly work constructively with me to amend the Bill and ensure that British defence investment is directed first to British industry, as well as carrying out a review of the contract for fleet solid support ships.