Procurement Bill [HL]

Baroness Hayman of Ullock Excerpts

Consideration of Commons amendments
Wednesday 25th October 2023 Lords Chamber

[Baroness Hayman of Ullock (Lab)]

My Lords, I start by thanking my noble friend Lord Hunt of Kings Heath for continuing to press the issue of the terrible practice of organ harvesting and to raise awareness of it. I do not think that there was sufficient awareness of what was happening in China until my noble friend tabled his amendments, and I hope that he continues to work on this in the future. So we are also very disappointed that the Government chose not to accept his amendment, but we are where we are.

As the noble Lord, Lord Fox, said, ethical procurement has to be right at the centre of how we continue to do business. Hikvision was debated during the progress of the Bill and there is more work to do on some of these issues.

Having said that, I thank very much the Minister and her team for her comments today and for her constructive approach to improving the Bill, following a fairly sticky start in Committee. It has been a pleasure to work with a Minister, department and noble Lords across the House who genuinely wanted to make a better Bill. I know that there were an enormous number of government amendments—perhaps the Bill should have been better drafted in the first place—but they were very important. We are in a much better place than where we started, so I thank the Minister and all noble Lords who helped to bring us here.

[Baroness Neville-Rolfe (Con)]

My Lords, I express my gratitude to the noble Lords, Lord Hunt and Lord Fox, and the noble Baroness, Lady Hayman, for their insightful contributions in this brief debate—not least on the threat from China and on ethical procurement. It has been a pleasure to work with them all and to set the slightly troublesome record of tabling a very large amendments in this House.

I of course acknowledge the importance of tackling the abhorrent practice of organ harvesting, but this amendment is duplicative, unduly burdensome and not appropriately suited to its intended purpose, which is why the Bill has been returned to our House in this form. For these reasons, I do not think that the amendment is necessary and I reiterate the many commitments we have made in this House and in the other place.

The noble Lord, Lord Fox, mentioned the NHS. The Bill applies to NHS bodies and their procurement of goods and services, which are not classed as healthcare services under the provider selection regime. I am pleased to tell the noble Lord, as I hope he knows, that the underpinning regulations were laid by the Department of Health and Social Care on 19 October, which puts a line under that and ensures a consistent approach.

The noble Lord, Lord Fox, remarked on the definition of sensitive sites. Both our Written Ministerial Statement from November last year, which was trailblazing to some extent, and the definition of sensitive sites that I set out only last month make our position on the issue clear to all concerned. We will be sharing annual reports on the removal of surveillance equipment, as I promised the House when we last debated this on 11 September.

Procurement Bill [HL]

Baroness Hayman of Ullock Excerpts

Consideration of Commons amendments
Monday 11th September 2023 Lords Chamber

[Baroness Hayman of Ullock (Lab)]

My Lords, Amendment 4A in this group is in my name. My amendment in lieu would insert a number of priorities and principles into the Bill. I will be fairly brief because we discussed these issues at length both in Committee and on Report but we felt that they were important enough—and were considered important enough by noble Lords during those debates—to bring the amendment back once again.

My amendment asks that due regard be given to a number of priorities and principles. The first is “maximising public benefit”. Public benefit is mentioned in the Bill but we feel that it is too vague, which is why we want to pin it down more within another amendment. Maximising public benefit would include

“the achievement of social value, through the securing of environmental objectives”;

many noble Lords were concerned at the lack of environmental objectives in the Bill. It would also include

“promoting innovation amongst potential suppliers”.

We also think that it is important to have

“value for money, by having regard to the optimal whole-life blend of economy, efficiency and effectiveness that achieves the intended outcome of the business case”.

In our previous debates, the Minister spoke strongly about the importance of value for money, so I hope that she understands why the second part of our amendment is clearly important and would strengthen the Bill.

The next part of my amendment deals with transparency. We think that it is important that we act

“openly to underpin accountability for public money”,

tackle corruption and ensure that all procurement is fully effective in achieving this. We also think that good management should be in place in order to have proper integrity, prevent misconduct and exercise

“control in order to prevent fraud and corruption”.

Importantly, we have added in “fair treatment of suppliers”. I thank the Minister for her work on improving the Bill for small and medium-sized enterprises, but we feel that more could be done to ensure that

“decision-making is impartial and without conflict of interest”.

The final part of my amendment concerns non-discrimination—that is,

“ensuring that decision-making is not discriminatory”.

The reason why we have had such a debate about this matter is that the principles were originally in the Government’s Green Paper and were consulted on. Our concern is that those principles were then left out of the Bill even though the objectives were included. So, my amendment would bring those principles back into the Bill.

We believe that social and public value are important requirements for any contracting authority to consider in order, for example, to encourage anyone contracting to work with local suppliers; to encourage contractors to reduce their CO₂ emissions; to encourage the hiring of more apprentices; and to encourage greater diversity. We believe that, if the Government are to deliver their ambitions of levelling up and net zero, it will be important to include these principles in the Bill. We know that social value is included in the national procurement policy statement—the Minister made much of the NPPS in our previous debates—but it is not referred to in the Bill. We also know that public benefit is mentioned in the Bill, but it is not clear to us how social value would sit within that framework. How will it all come together to ensure that it works for the public benefit? We know that the NPPS will include the Government’s strategic priorities but, again, we do not know clearly what those are. Further, the Bill does not mention innovation, which is why it is an important part of my amendment. As the noble Lord, Lord Lansley, said when we previously debated the Bill:

“When our current Prime Minister was Chancellor of the Exchequer, he put innovation at the forefront of his economic approach to improving productivity”.—[Official Report, 28/11/22; col. 1619.]


So why not include it in this Procurement Bill?

As the Minister said in her previous response to similar amendments, innovation and competition have an important part to play here. Procurement should be an enabler of innovation. It is important that there is clarity around these principles and objectives. How will innovation be part of it, for example? The Bill will shortly become legislation. We must revisit these concerns and we want to persuade the Minister to consider very carefully what we have been saying and why we are saying it. From her responses, we do not believe that at previous stages there was adequate explanation of how all this would operate. Good sentiment from the Government and the Minister, and promises around an NPPS we have not seen, are not sufficient to ensure that we have the best procurement legislation possible, which we all want to see. Our amendments would help achieve that end.

Sadly, the Minister has again disappointed me with her introduction on these issues, although I thank her for all the work she has done as we have progressed so far. It is my intention to move my amendment.

[Lord Lansley (Con)]

My Lords, I will contribute on Amendments 4A and 4B in particular. As noble Lords will recall, the structure of Amendment 4A, as an amendment in lieu of the Commons Amendment 4, incorporates to an extent some of the issues raised in the strategic priorities that your Lordships sent to the Commons to be included in the national procurement policy statement. I will explain how that works in a minute.

Like other noble Lords, I am grateful for the time and effort that my noble friend the Minister has given to listening to what we had to say. On Commons Amendment 5—which would get rid of the reference to “strategic priorities”—I was focused on innovation, as she knows. Innovation is essential to the quality and effectiveness of procurement. Also, public procurement is a substantial part of this country’s economic activity. If it promotes innovation, it can make a significant difference to our overall economic performance and to reconciling our productivity problems. The fact that, in the absence of Amendment 4, the Bill would make no reference to innovation is such an omission that, on those grounds alone, Amendment 4A should be added back to the Bill.

When we tabled our amendment, the noble Earl, Lord Devon, the noble Baroness, Lady Worthington, and I tried to ensure that the national procurement policy statement was clear about what we regarded as enduring strategic priorities. We have backed off from that. My noble friend and the Minister in the other place were clearly told that we must have maximum flexibility. I still do not understand why the Russian invasion of Ukraine might mean that public procurement in the United Kingdom should not have regard to social value; none the less, leaving that to one side for a moment, I accept that there is an ideological commitment in government to the idea that everything that government does must be so flexible that you cannot even predict some of the basic principles within it.

We have dropped the strategic priorities; we have made them principles. As the noble Baroness, Lady Hayman, rightly has it, we have moved from “must include” to “have regard to”. Therefore, Ministers are not constrained to include in the statement innovation, the achievement of social value, the achievement of environmental objectives or, for that matter, transparency, integrity, fair treatment, non-discrimination and value for money. However, the idea that any of these things would be left out of a national procurement policy statement is wholly unacceptable.

I come back to the essential question: what are we trying to do? We are trying to set the framework for contracting authorities to undertake public procurement. From our point of view, the statement should include whatever the Government think it should include but it should not exclude such basic central principles of public procurement. We have only to ask ourselves what conclusion we would draw if the Government were to send a draft of an NPPS to Parliament which left these things out. In my view, we would have to reject it. What is the benefit of that? Better to put it in the Bill now, make it clear to Ministers and, frankly, officials, that it should be in the statement so that, when the draft of the NPPS comes, we can tick the box, send it forward and approve it.

The noble Earl, Lord Devon, will add matters on social value. I just say that we may have left the EU public procurement regime but, when you look at the centrality of social value to public procurement in other jurisdictions across Europe, the idea that you would not seek social value through public procurement seems wholly unacceptable.

I was quite struck by the paucity of argument presented in Committee in the other place when our amendment to the Bill was deleted. In addition to:

“It needs to be as flexible as possible”,—[Official Report, Commons, 31/1/23; col. 54.]


which was predictable, what irritated me especially, as my noble friend on the Front Bench is now aware, was that references to integrity, transparency and value for money are already in the Bill, in Clause 12. The Committee in the other place clearly paid no attention to the Bill in front of it, since Clause 12 relates to covered procurement. As we noticed in our debates in Committee, the national procurement policy statement is not confined to covered procurement. It extends to all procurement by government, though not including the NHS, which for these purposes seems to be excluded from “public authorities”, which is a curious definition in itself.

We knew that the NPPS was wider. The Committee at the other end seemed somehow to imagine that covered procurement was enough, but it excludes everything under about £112,000 in value. Therefore, many small procurements would not be affected by it. It simply is not acceptable. We need to go back and ask the Commons to think again about the exclusion of such central principles from the national procurement policy statement. It has been a long time coming back. We are nine months on from the point at which we sent the Bill to the Commons. We took some time getting it to the point that we did. Noble Lords will recall that on the first day in Committee we received 50 government amendments, this clever idea of covered procurement arising only at that point and not in the original draft of the Bill.

To make a final, acerbic comment, I find it somewhat astonishing that during the passage of the Bill the Government have been able to make many hundreds of amendments that they chose to make. At this stage, we are asking for only a small handful that the Lords want to make. The Government at this point might just bend and accept those amendments.

--- Later in debate ---

Moved by

[Baroness Hayman of Ullock]

At end insert “and do propose Amendment 4B instead of the words so left out of the Bill—

4B: Clause 13, page 10, line 8, at end insert—
“(b) have regard to the following priorities and principles—
(i) maximising public benefit, including by the achievement of social value, through the securing of environmental objectives and from economic benefits, including by promoting innovation amongst potential suppliers,
(ii) value for money, by having regard to the optimal whole-life blend of economy, efficiency and effectiveness that achieves the intended outcome of the business case,
(iii) transparency, by acting openly to underpin accountability for public money, anti-corruption and the effectiveness of procurements,
(iv) integrity, by providing good management, preventing misconduct, and exercising control in order to prevent fraud and corruption,
(v) fair treatment of suppliers, by ensuring that decision-making is impartial and without conflict of interest, and
(vi) non-discrimination, by ensuring that decision-making is not discriminatory,””

--- Later in debate ---

[Lord Fox (LD)]

Eagle—thank goodness. I thought it was an evil eye. I was going to describe it as beady. I thought his “evil eye” was going to be upon the Minister and I was a little concerned for her safety. It is getting late.

Moving on, as my noble friend set out, we will support the amendment from the noble Lord, Lord Hunt. There can be no place in the UK supply chain for businesses that engage in this behaviour, and we have to be absolutely sure that there is no place, which is why the noble Lord is right to want to explicitly write this in. I regret that the fact that my noble friend Lady Brinton’s amendment was not accepted means that if the noble Lord is successful, his amendment will not apply to the National Health Service, which seems rather unfortunate as it would probably be the prime customer. None the less, getting it in writing and putting it in there is very important and will be enthusiastically supported.

[Baroness Hayman of Ullock (Lab)]

My Lords, I will be very brief. I thank both noble Lords for such excellent speeches on really important issues and important amendments that have been brought back for further discussion. The noble Lord, Lord Alton of Liverpool, again and again draws our attention to where we need to act on wrongs in this world. Clearly, we must do all we can to tackle modern slavery, genocide and crimes against humanity. He is right to draw our attention to the serious examples he gave us in his speech of where this is happening. We believe that procurement policy can and should contribute to that end where it can. I say to the Minister that the Government have listened to much of what the noble Lord has said; we have moved forward to some extent on this.

My noble friend Lord Hunt’s amendment clearly spells out why we need to be doing something about this. Reading his amendment, what struck me was the definition. I will read it, because I think it is at the crux of this:

“‘Forced organ harvesting’ means killing a person without their consent so that their organs may be removed and transplanted into another person”.


I cannot think of many things more appalling than that, so we fully support my noble friend. He deserves the thanks of the House for bringing this forward. He has our full support, but I wish the Government would consider amending the Bill in this way.

[Baroness Neville-Rolfe (Con)]

My Lords, I agree with the noble Baroness on the excellence of the two speeches we have had during this important debate. I thank the noble Lord, Lord Alton, again for his contribution. I am delighted that we have been able to agree on this matter so that the changes we have agreed can be moved forward. I thought his speech, ranging from what the Co-op and Tesco are doing, through the Cambridge spies, the absolute horror of what is being imposed on the Uighurs, and all the other things he said that I will not repeat, bears reading and reflecting on.

On the use of surveillance equipment—to respond to one point the noble Lord made—in the wider public sector, I should add that if the Government consider the risk to be intolerable, they are able to take action. That does not have to be enshrined in primary legislation. On the point about parliamentary scrutiny, the Government carefully consider and respond to all Select Committee recommendations. The annual written report on surveillance cameras, once laid in Parliament, will be available to all committees. I am sure it will receive appropriate scrutiny and a great deal of interest.

Turning to the remarks made by the noble Lord, Lord Hunt, and the noble Baronesses, Lady Northover and Lady Hayman, we all agree that organ harvesting is a horrific practice. However, given that we already have provisions in this Bill relating to professional misconduct—which will cover organ harvesting—it would seem inappropriate and odd to single out this particular, albeit horrific, practice in this Bill, and not others, especially given that the risk of this practice occurring in public contracts is low. While the issue is of key importance, the amendment itself largely duplicates the Government’s existing efforts. I cannot agree with the criticism of this given all we have done to try to improve this Bill and make the arrangements better. As I have said, there is a reference to organ harvesting in the NHS legislation. To pick up on the various security areas we have now in the Cabinet Office, they will work closely together. That is how you defeat the enemy on these things.

The Deputy Prime Minister has spoken in the other place on these issues today, and the Leader of the House will be repeating the Statement shortly when we finish this business. Obviously, that is some context. This Government have already taken steps to act on the risk from foreign influence and demonstrated that they are willing to act when the risk is intolerable. Our action on the risk of using certain surveillance equipment on government-sensitive sites was necessary and proportionate. This Bill will help us further, as the national security debarment provisions will enable us to act in public procurements where we see malign influence. This is a major change that has been made to this Bill. It is very encouraging that this House has influenced it and then welcomed it on its return from the other place. This is how good legislation is made, I hope.

It is crucial that we bring this most important Bill to Royal Assent as quickly as possible. I hope noble Lords will back us today, and I hope that in view of what I have said, the noble Lord will consider withdrawing his amendment. In any event, we need to move forward and get this Bill on the statute book.

Retained EU Law (Revocation and Reform) Bill

Baroness Hayman of Ullock Excerpts

Report stage
Monday 15th May 2023 Lords Chamber

[Baroness Bennett of Manor Castle (GP)]

My Lords, having attached my name to Amendment 47 in the name of the noble Earl, Lord Caithness, and the noble Baroness, Lady Willis, I shall make just a couple of points on that. I stress Amendment 48, to which the Green group would have attached our names had there been space, and the point made by the noble Lord, Lord Krebs, that this is writing into the Bill what the Government tell us again and again, as they have for years, they want to achieve. It is simply delivering the Government’s expressed desire.

I want to make just three points on Amendment 47. There is some important terminology, with which I suspect the noble Baroness, Lady Willis, may have had something to do. That refers to the methodological quality of the evidence. There is increasing awareness in the scientific community of the need to look at the problem of publication bias: the probability that a scientific study is published is not independent of its results. That is just one way in which we have real problems with the methodology of what has been published and the Government have considered in the past, to which the amendment is to some degree addressed.

Proposed new subsection (5) mentions

“a sufficiently wide view of the ecological impacts”.

I will take a case study of this. Scientists are increasingly concerned about the combined cocktail impact of pesticides, plastics and pharmaceuticals together in the environment. I point the Minister to a European report by the CHEM Trust, Chemical Cocktails: The Neglected Threat of Toxic Mixtures and How to Fix It and, independently occurring, a launch this month in the UK of a report from the Wildlife and Countryside Link with the Rivers Trust and UK Youth for Nature, Chemical Cocktails: How Can We Reduce the Toxic Burden on Our Rivers? The scientific view taking that overall wide ecological view is increasingly being recognised as crucial, and massively understudied.

The final point I want to make is that Amendment 47 is reflective of something that I am increasingly finding: groups of scientists—including established scientists whom you might expect that have a very good route into the Government—are coming to me and saying, “Please advise us on how we can get through to the Government to make sure that our scientific advice and discoveries are acted on”. There is real feeling in the scientific community that there has been a breakdown in communication and consideration from the Government in terms of the current science. This amendment seeks to address those issues.

[Baroness Hayman of Ullock (Lab)]

My Lords, I shall be very brief. I just want to give particular support to Amendment 48, to which I have added my name. We cannot allow the Bill to weaken environmental and food safety standards. We know that Defra has by far the largest share of affected regulations of any department, so the Bill really will have significant implications for environment and food safety law-making unless it is done well.

I will not repeat the reasons why we need these amendments, but what has come across very clearly is the fact that there is widespread and strong support for the environmental non-regression principle.

Importantly, Amendment 48 would give transparency but also legal substance to the warm words of the Minister, as the noble Lord, Lord Krebs, mentioned. On day 2 of Committee, the Minister said that the Government are committed to maintaining high environmental standards and that he wanted

“to see … standards improve in future”.—[Official Report, 28/2/23; col. 208.]

I absolutely believe that is the case but, as a matter of law, the Bill provides no assurances or protections and cannot bind the hands of future Ministers. It is absolutely critical that these assurances and protections are in place in the Bill because, without a non-regression principle in law, they simply are not there.

On that basis, if the noble Earl, Lord Caithness, wishes to test the opinion of the House, he will have our support.

[The Minister of State, Department for Environment, Food and Rural Affairs (Lord Benyon) (Con)]

My Lords, I am grateful for a really interesting debate. Before I begin to address the amendments in this grouping, I say that I know that there was some discussion earlier today regarding Defra’s plans for water quality, particularly the Bathing Water Regulations and the water framework directive. I take this opportunity to reassure noble Lords that neither of these pieces of REUL is on the schedule to this Bill and Defra has no intention of repealing either of these pieces of important legislation. The noble Baroness, Lady Bakewell of Hardington Mandeville, raised this issue, and I absolutely give them that assurance.

Under this Government, we have only strengthened our legislation on water quality. In April, we published our new integrated plan for water, which marks a step change in how we manage our waters. It looks at both water quality and water resources together. We completely understand people’s concerns about our rivers, lakes and seas and the pressures that they face. This plan is our response. In the plan, we set out how we will streamline our water policy and legal framework; this includes the water framework directive 2017. We consider that there are opportunities to improve the regulatory system through reviewing the implementation of the water environment regulations 2017 in order to improve water outcomes on the ground while retaining our goal to restore 75% of water bodies to good ecological status.

I turn to Amendment 47, moved by my noble friend Lord Caithness. This amendment would introduce specific statutory requirements on Ministers when deciding what updates may be appropriate under the power to update in Clause 17 in the light of scientific developments. The amendment would also require that, where Ministers intend to exercise the power on legislation relating to environmental law, the review of scientific evidence must consider whether the evidence accounts for the ecological impacts. I say this to my noble friend: the power has purposely been drafted in this way both to allow for broad technical updates and to ensure that it captures the wide range of REUL across a variety of policy areas. We cannot predict the nature of scientific developments or technological changes to which REUL may be subject, nor the changes that might be appropriate in those instances in future.

I totally agree with my noble friend’s point about outliers. As he said, we had this debate during the passage of the Genetic Technology (Precision Breeding) Bill. I constantly challenge the scientific advice that I receive in Defra to make sure that we are not creating the opposite of diversity or a sort of monogamous view of scientific progress. Outliers are the best challenge to that occasional tendency to be too absorbed in one particular group of views. This has been very eloquently described by notable international conservationists such as Allan Savory. That ability to have only research that is peer-reviewed sometimes requires those commissioning science to look more broadly. That is what we try to do, and I assure my noble friend that his points are well received. However, I gently suggest that placing statutory requirements on Ministers in the use of this power, including the requirement for scientific updates to be based on the latest evidence, is simply not necessary.

First, public bodies are already under public law duties to act reasonably and to consider relevant factors in decision-making. Secondly, Ministers will need to be reasonable and consider the relevant scientific evidence when evaluating whether updates, and what updates, may be appropriate. Provided a Minister acts reasonably and considers the relevant factors, it is ultimately for them to decide what is considered an appropriate amendment in light of a change in technology or development in scientific understanding.

The UK is a world leader in environmental protection and, in reviewing our REUL, we want to ensure that environmental law is fit for purpose and able to drive improved environmental outcomes. Furthermore, this Government have been clear throughout the passage of the Bill that we will uphold our environmental protections. We remain committed to our ambitious plans set out in the net zero strategy, the Environment Act and the Environmental Improvement Plan 2023, which sets out the comprehensive action we will take to reverse the tragic decline in species abundance, achieve our net-zero goals and deliver cleaner air and water. The provisions in the Bill will not alter that. I therefore suggest that the requirements of this amendment are not necessary.

The proposed new clauses in Amendments 48 and 49, tabled by the noble Lords, Lord Krebs and Lord Whitty, respectively, establish a number of conditions relating to environmental protections and food standards that Ministers must meet when intending to use the powers under Clauses 13, 14, 16 and 17. They include satisfying a range of conditions in the amendments so that environmental and consumer protections relating to food safety and labelling will be maintained and that the proposed new regulations do not conflict with a specific list of existing international environmental agreements. They also introduce a new procedural requirement which Ministers must meet to be eligible to exercise the powers. This includes seeking advice from relevant stakeholders and publishing a report addressing specific points concerning environmental and consumer protections for the new regulations.

Amendment 48 seeks to insert a new subsection into Section 4 of the Food Standards Act 1999, introducing a requirement for the Food Standards Agency to include in its annual report an assessment of the impact of the delegated powers on areas of concern to consumers relating to food, under that section of that Act. These new and broad-ranging provisions would have a severe impact on the Government’s ability to use the Bill to legislate and deliver on our environmental and food goals, due to the resource-intensive nature of the conditions proposed.

Moreover, the list of relevant international obligations set out in the amendment is far from comprehensive and would become rapidly outdated in the context of ever-evolving international legislation. The delegated powers in the Bill are not intended to undermine the UK’s already high food standards, nor will they impact the UK’s status as a world leader in environmental protection. Indeed, this Government are committed to promoting robust food standards nationally and internationally, so we can continue to protect consumer interests, facilitate international trade—a very good point made by the noble Lord, Lord Whitty—and ensure that consumers can have confidence in the food they buy. The UK has world-leading standards of food safety and quality, backed by a rigorous and effective legislative framework.

Under the Food Standards Act 1999, the FSA already has as its core statutory function the objective of protecting public health from risks that may arise in connection with the consumption of food, including risks caused by the way it is produced or supplied, and protecting the interests of consumers in relation to food. The Bill and the powers in it do not change that. Accordingly, the FSA would already have to consider the effect on public health of any legislation that it would ask the relevant Minister in its sponsor department, the Department of Health and Social Care, to make in relation to food before that legislation would have effect. Alongside this, Defra maintains a well-established set of relationships with the agrifood sector, broadly aimed at upholding the sustainability, productivity and resilience of the sector. This includes representation, from farm to fork, of around 150 major food and drink companies and trade associations, as well as a range of industry CEOs and senior figures, to discuss strategic opportunities and challenges facing the agrifood chain.

We also want to ensure that, in reviewing our REUL, environment legislation is fit for purpose and able to drive our positive environmental outcomes. I take the point very eloquently made by the noble Baroness, Lady Hayman, but this is much more than warm words: we have written into law our environmental protections, our ambitions for reversing the decline of species and, in very strict food legislation, on the health of food.

The REUL that we are revoking as part of the schedule to the Bill is obsolete, expired, duplicated or no longer relevant to the UK. It is not required to uphold environmental protection. For example, around half of fisheries REUL can be removed as it is no longer relevant, has expired or relates to areas we do not fish in. For example, I am sure all noble Lords will agree that REUL setting fishing opportunities for anchovy in the Bay of Biscay for the 2011-12 fishing season, which has now expired and is no longer applicable in the UK, is pointless to have on our statute book. Therefore, the proposed conditions on food standards and environmental protections are simply unnecessary. The reforms these powers will enable are vital to allow the UK to drive genuine reform and seize the opportunities our new status allows.

I enjoyed being on the same side as the noble Lord, Lord Krebs, on previous legislation. I hope that my attempt at honeyed words might have got him onside, but we will have to see how that goes. There are two reasons, by and large, why Governments resist these kinds of amendments: first, they are not necessary—there is already law to provide for the measures the amendments seek—and secondly, they are too burdensome. For these two amendments, I submit, both those factors come into effect: they are not necessary and they are too burdensome, so I ask that they not be pressed.

Parliamentary Democracy in the United Kingdom

Baroness Hayman of Ullock Excerpts

Tuesday 25th April 2023 Lords Chamber

[Baroness Hayman of Ullock (Lab)]

My Lords, I thank the noble Baroness, Lady Jones, for bringing forward this brief but fascinating debate, and congratulate the right reverend Prelate the Bishop of Lichfield on his excellent speech. I offer him our warmest welcome to the House.

One of Parliament’s greatest strengths has always been its evolution and ability to adapt. Given the recent decline of faith in politics that we have heard about, now more than ever we need to consider how our democracy can be reformed.

Britain is one of the most centralised states in Europe. That is one of the reasons why Labour has committed to undertake a rebalancing of power, providing a framework and process for economic devolution to towns and cities across England. However, we also recognise the need for a new constitutional settlement here in Westminster, including guarantees over the autonomy of local government, clarification over what citizens can expect from their Government, and a commitment to tackle geographic economic inequalities.

Given recent events, it is important that Westminster reflects on how trust and integrity can be restored. We need powers to clamp down on inappropriate outside earnings for MPs, and to look at how to eliminate foreign and corrupt money from UK politics. As we have heard, it is also important to consider how this Chamber can be more efficient and effective by exploring how the size of the House can be reduced while retaining what works best, because often we work very well.

The UCL Constitution Unit’s third report on democracy said that most people

“wanted a stronger parliament and thought ministers should not be able to change the law without full parliamentary scrutiny”.

We have seen a move in the opposite direction. The one thing I ask the Minister to take from this debate is to take that back to the Prime Minister and the Cabinet.

Procurement Bill [HL]

Baroness Hayman of Ullock Excerpts

3rd reading
Tuesday 13th December 2022 Lords Chamber

[Baroness McIntosh of Pickering (Con)]

My Lords, I think I am the sole surviving Member of the Committee here today who contributed. I congratulate my noble friend the Minister and the Bill team on getting the Bill thus far. I am obviously immensely disappointed not to have succeeded in my attempt to source more local food in our procurement contracts, but I hope that this can be redressed in the other place.

My noble friend alluded to something that is a source of great concern to me. I have in my possession the memorandum from the Scottish Government, which expressed their concern and inability to add their consent to the Bill. Does she not share my concern that it would be very regrettable if the Scottish Government felt obliged to carry out their own Bill in this area, because of their concern about the continued ability to carry out cross-border procurement? Could this still be addressed in the other place before the Bill reaches Royal Assent?

[Baroness Hayman of Ullock (Lab)]

My Lords, I am sure that noble Lords will be very surprised to know that I thank my noble friend Lord Coaker for supporting me and sticking with the Bill all the way through. It has been a long haul, and I think we are all pleased we are at Third Reading.

I thank the noble Lord, Lord True. At the beginning of the Bill, he gave me an awful lot of time, as did his officials, when we had some serious concerns. As the noble Lord, Lord Fox, mentioned, we had a bit of a sticky start. The officials worked incredibly hard to get us to a position where we could properly debate the issues in Committee; at the beginning, we were not in that position, unfortunately. We all congratulated the noble Lord, Lord True, on his promotion, but we were also delighted as a Committee when the noble Baroness took over this Bill, because she was genuinely interested in what we were debating and genuinely understood what we were trying to achieve. I think she worked very hard and brought in some important improvements to the Bill, having listened to Committee. I thank her for her time, efforts and energy in helping us all to come out with a Bill that was better than what we had at the start.

I also thank the noble Lord, Lord Fox, and other Members who took part for the constructive work we did going forward on the Bill. It is much appreciated. I think all Members of the Committee would agree that the Bill we have sent to the other place is in a much better state than it was when we received it. I thank everybody very much for their hard work. I hope the other place considers our amendments seriously—I think they make the Bill better—and perhaps brings some further improvements that we can look at when it arrives back. It has been a pleasure to work on the Bill, but I am pleased we are now moving on.

[Baroness Neville-Rolfe (Con)]

I would like to briefly thank all those who have spoken. I agree with them on almost everything, and I also agree that we should commend my noble friend Lord True, now the Leader of the House, perhaps partly because of his achievements in this area. It has been a great pleasure to become a gamekeeper for the Government rather than be a poacher for the Back Benches. My noble friend Lady McIntosh of Pickering raised the devolved issues; of course, we hope that these things can be amicably resolved in the other place. Procurement is a devolved issue—the Scottish Government have not joined the UK Government’s Bill and will be maintaining their own legislation. Contracting authorities in Scotland will therefore not be bound by the Bill other than to enable their use of frameworks, dynamic markets and joint procurement. They are operating their own regulations, having transposed the EU directives into their own statute book. There are some outstanding issues, particularly with the Scottish Government. We are pursuing those, and I hope they will be resolved before we see the Bill again.

Procurement Bill [HL]

Baroness Hayman of Ullock Excerpts

Report stage
Wednesday 30th November 2022 Lords Chamber

[Lord Fox (LD)]

My Lords, this has been an interesting debate that covered a wide range of interests. It is always a pleasure to follow the noble Lord, Lord Moylan, and the case he made in favour of Amendment 72 was strong and subtle because by acknowledging the role that Clause 40 plays in this Bill, he also acknowledges the need for Amendment 72.

The noble Lord mentioned Amendment 113. The purpose of having the list in it is to make it clear that in the past, NHS staff have not been included and there are very real examples of problems in this area. Its purpose was to draw your Lordships’ attention to the need to include that cadre of people, who are making very large public procurements, in the realm of this Bill. He will be no doubt delighted to know that it is unlikely that I will press the amendment to a vote.

[Baroness Hayman of Ullock (Lab)]

The noble Lord, Lord Scriven, ably and clearly laid out why he has tabled his amendment and the concerns in this area. They partly remain from the debate we had in Committee, but they have also been raised on a number of further occasions, including earlier today. We have heard why people are concerned and why they think this amendment is needed. There are concerns around the VIP lanes and the way that different contracts were awarded during the Covid pandemic.

Listening to the debate today, earlier debates and other discussions, including in the media, as the noble Baroness said, it is clear that we have a real problem with a loss of trust in the procurement system, particularly government contracts. For me, this Bill is an opportunity to restore that trust. The Minister will no doubt say that the Government have listened and heard what was said, and the VIP lanes will not happen again. I trust what the Minister says, and we know that other people have said the same, but my concern is that if you do not close loopholes in legislation, they are still there for others to exploit. In my opinion, this opens a loophole because it makes it possible to hand out contracts in the way it was done before.

It is incredibly important that we retain the ability to procure when the usual channels need to be speeded up, for example, or if there is a need to do things in a slightly different way. Importantly, this clause allows that, but at the same time we must not allow this loophole to exist going forward. That is why we support this amendment and if the noble Lord wishes to press it to a Division, he will have our full support.

The noble Lord, Lord Aberdare, who has been extremely clear in putting across the concerns all the way through the progress of this Bill, made some really important points about late payments. Again, I know the Minister is keen to do what she can to resolve that problem, so I look forward to her response.

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[Baroness Hayman of Ullock (Lab)]

My Lords, I have some amendments following on from the government amendments. They are simple probing amendments on the figure that the Government have come up with in their amendments. Amendment 79 seeks to delete from Clause 49 the figure of “£2” and insert “£3”. All I am doing here and in my further two amendments is trying to probe where the figure that the Government put into their amendments came from. I appreciate that in her introduction the Minister said that a lot of this was based on reducing admin requirements and addressing concerns raised by the Local Government Association, for example, but it seems quite a big jump. We are seeking to understand why the threshold has jumped from £2 million to £5 million. If the Minister could give some explanation as to where the figure came from, we would be very grateful.

I welcome government Amendment 129 on setting up the online system. That was raised by a number of noble Lords and discussed at length in Committee, so it is good that the Government have acted and produced this amendment. The noble Lord, Lord Clement-Jones, raised the important point that anything that is introduced has to be seen to be fit for purpose, so again it would be very helpful if the Minister could provide noble Lords with assurance as to how the system will work. If there is no annual report on the operation of the system, what is the overview process? How is it being assessed and monitored to ensure that it is fit for purpose?

I shall comment very briefly on the two amendments in the name of the noble Baroness, Lady Noakes. She introduced them clearly and succinctly, as she always does, for which I am very grateful. I am aware that the LGA had concerns about these areas, as it raised them with us, so I thank her for tabling the amendments. They address a very legitimate concern, so I hope the Minister has listened and will revisit this area of the Bill.

[Baroness Neville-Rolfe (Con)]

My Lords, Amendments 79, 81 and 105 have been tabled by the noble Baroness, Lady Hayman, and the noble Lord, Lord Coaker, to amend to £3 million the financial threshold above which contracting authorities would be required to publish contracts and contract modifications, and set and publish KPIs. The government amendments raise these thresholds to £5 million. The intention of this is to reduce the administrative burden on contracting authorities, while still providing increased transparency on larger contracts. Redacting contracts for publication where they contain commercially sensitive information is particularly burdensome for smaller contracting authorities, requiring detailed and costly checking by legal teams that they may not have or expensive legal advisers.

Where does the figure come from? I do not know exactly; that is the honest answer. I was offered options of £50 million, £10 million and £5 million. I chose £5 million because that is quoted in the Sourcing Playbook, which seemed a reasonable point. I believe that a threshold of £5 million balances the benefits of transparency with the costs and burdens of implementation.

The higher threshold in the government amendment has been welcomed by the Local Government Association. We want the arrangements to work, so we will monitor them carefully. We have powers to change the thresholds if we need to do so—for example, to bring in extra contracts as the system grows and matures—and if analysis of the new data gathered allows us to better understand how to ensure that the obligations are effective and proportionate; or, to go the other way, if we end up with a lot of difficulties. It seems a reasonable approach.

Amendment 130 tabled by the noble Lords, Lord Clement Jones and Lord Fox, seeks to require the Minister of the Crown to report annually on performance standards and feedback on the online system, including stakeholder satisfaction and accessibility. The data on the platform will be available in real time, and interested parties—of which there will be many—will be able to access information by using the tools available on the platform and by downloading the data for external analysis, such as statistics on the publication of notices and the progress of contracts. The platform will be accessible, as I have said, and will comply with the relevant legislation, including the Public Sector Bodies (Websites and Mobile Applications) (No. 2) Accessibility Regulations 2018, on which I am not, I fear, an expert. The Government are continuously monitoring the existing online platform that supports noticing under the current regulations and will continue to do so under the new regime and make changes as they are needed, so we are not inclined, on this occasion, to write in a review clause.

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[Lord Lansley (Con)]

Anyway, I am on my feet not to try to answer the noble Lord’s question but to explain Amendment 167. Those present in Committee will recall that debate. There was some degree of uncertainty. Again, I appreciate my noble friend’s time and attention on the issue in the conversations we have had about it.

I will just explain the amendment’s purpose. Under Section 8 and Schedule 9, there is a process for the future whereby procurement-related chapters in future free trade agreements can be added to the Schedule 9 list and, by extension, give access to UK public procurement opportunities by statutory instrument. I agree with that. Because the Bill will achieve that effect, in the Government’s view it can repeal the Trade (Australia and New Zealand) Bill, because the purpose of that Bill is to bring into effect the procurement chapters of the Australia and New Zealand free trade agreements. That will no longer be necessary once this Bill has added them to Schedule 9 and it comes into force.

There are two issues. The first is timing. It was clearly the Government’s expectation that the Trade (Australia and New Zealand) Bill would have proceeded more rapidly through the other place—that it would be here and be concluded well before this Bill completes its passage into law, and that the sequencing would therefore work very straightforwardly. That might still be true, although the Trade (Australia and New Zealand) Bill completed Committee in the other place but has not yet been timetabled for Report. It is going more slowly than was originally intended. As I think noble Lords said in our debate on Monday, perhaps the Minister could attempt to explain the delays in the legislative process. Oh no, it was at Questions: my noble friend Lord Markham was not at liberty to explain the delays in the Government’s legislative programme, which was very sensible on his part. We cannot be sure that the Bills will be that way round but, in any case, it is more likely that the Trade (Australia and New Zealand) Bill will proceed before this Bill completes its passage. Let us hope that is the case.

The second and, in my view, more important question then comes into play. What if the Trade (Australia and New Zealand) Bill were to be amended? For example, there is an Opposition amendment tabled for Report in the other place, the effect of which would be to include impact assessments for a number of years on the Australia and New Zealand trade agreements—so, in fact, it is not restricted to the question of procurement but is about the overall impact of the two FTAs.

The effect of this Bill, as it is drafted in Schedule 11 on page 117 at the back of the Bill, would be to repeal it anyway. We would be in the unhappy position, if we carried on as we are, that we might amend the Trade (Australia and New Zealand) Bill and then find that that amendment, whatever merit it may have, would be repealed by virtue of the Procurement Act in due course. This is not a satisfactory outcome. Will the Minister tell us that the Government are now aware of this potential problem, subject to the passage of events and that, if it should turn out that the Trade (Australia and New Zealand) Bill is amended, the Government will commit to facilitating that any such amendment is not repealed by virtue of the provisions in the Procurement Act?

My amendment would avoid that possibility, because it would repeal only those provisions that were in the Bill when it was introduced on 11 May this year. If the Government cannot accept that, I hope that my noble friend will at least say that the Government will facilitate whatever measure is necessary—because whichever is the second Bill can change the first Bill, because Parliament cannot bind itself. So, almost by definition, the Government will have a mechanism—if they are willing to use it—to put things right using the second Bill. I hope my noble friend will give that reassurance.

[Baroness Hayman of Ullock (Lab)]

My Lords, both the amendments in this group ask for clarification and information from the Minister on the exact status of the trade agreements and how they are going to operate. I think the loophole that the noble Lord is trying to close is something that we need to think about very seriously, because we do not want to have trade agreements that then start to unravel. That is one of the big concerns around this.

In Committee, we had a quite extensive debate around this. I asked the Minister a specific question on Schedule 7 and I thank her for her detailed response, which I think it is worth drawing to the attention of the House. Schedule 7 says that a discretionary exclusion ground applies to a supplier whether the conduct occurred in or outside the United Kingdom. The question I wanted confirmed was whether Schedule 7 covered procurement opportunities that came through trade agreements.

The response from the Minister was that the conduct overseas, as referred to in Schedule 7, does cover anything that happens within procurement coming out of a trade agreement. I was very grateful for her clarification on this and thought that I should draw it to the attention of the House. It is a very helpful clarification of the remit of the Procurement Bill as far as trade agreements are concerned. However, it would be helpful if the Minister was able to provide reassurance, explanation and clarification on the questions raised by the amendments from the noble Lords, Lord Purvis and Lord Lansley, so that we all know exactly where we are, particularly around the Australia and New Zealand trade agreement.

[Baroness Neville-Rolfe (Con)]

My Lords, I thank noble Lords for their contributions to this short debate, particularly the noble Baroness, Lady Hayman, for repeating the advice we received on the application of Schedule 7 so that it sits on the face of Hansard. I hope the other things I have to say will help with her general understanding of the interplay between the trade and procurement Bills under consideration.

I will start by responding to my noble friend Lord Lansley. I understand the point he makes in his Amendment 167: in the coming months there may be important amendments to the Trade (Australia and New Zealand) Bill that will be designed to survive into the new regime. However, I respectfully suggest that an open-ended preservation of unspecified parts of that Bill, as his amendment proposes, is not the right way to deliver what is needed.

As he knows, I also think it would be a legislatively curious way of going about things. I have been consistent in saying that when we are certain of the amendments needed as a result of that other Bill, we will consider the provisions in the Procurement Bill and the best way to retain any such obligations. As I understand it, the timing should allow for this. Thanks to the eloquence of my noble friend Lord Lansley, we are well aware of the problem. Of course, the Government will have due respect for the expressed will of your Lordships’ House.

The noble Lord, Lord Fox, asked about contracting authorities. My response is that they just need to follow the provisions in the Bill. That will mean they are compliant with the trade agreements. I hope this gives the noble Lord some reassurance: they do not need to familiarise themselves with each individual agreement when they are engaged in procurement. If he finds that confusing, I am sure we can talk further on another occasion.

Amendment 127, tabled by the noble Lords, Lord Purvis and Lord Fox, has the effect that a contracting authority cannot be considered to discriminate

“if it takes into account environmental, social and labour considerations”

in dealing with a treaty state supplier. To accept this would create the opportunity for UK contracting authorities to actively discriminate against overseas suppliers. That could place the UK in breach of our international trade agreements, including the GPA. I am sure noble Lords will agree that that would not be acceptable, but I hope they will take some comfort from the fact that the Procurement Bill already achieves the main objective of this amendment. It includes flexibility to structure procurements in a way that furthers these ends. For example, Clause 22 is drafted widely enough that these matters can be used by contracting authorities as part of the basis for determining a winning bid, as long as it is non-discriminatory.

The noble Lord, Lord Purvis, who I think is not in his place, is a great expert in this area. He was concerned that some trade agreements refer to environmental and social criteria and some do not. I can reassure noble Lords that, where a trade agreement does not expressly permit these criteria, it does not mean that a contracting authority in the UK cannot take them into account. The Bill and the UK’s international commitments allow contracting authorities to continue to apply these criteria as they have for many years.

Procurement Bill [HL]

Baroness Hayman of Ullock Excerpts

Report stage
Monday 28th November 2022 Lords Chamber

[Lord Greenhalgh (Con)]

My Lords, I rise because I was named by my noble friend Lord Moylan, and because this is a subject that I feel very passionately about, as someone who spent 16 years as a councillor and six years as a council leader. Indeed, I am very proud of the work we did to collaborate. It is something that came to me a little late in my local government career, because I used to believe in two things: competition and fear—that is, fear of failure—but collaboration is also important in local government.

My noble friend Lord Moylan pointed to the vision we had in west London to come together to collaborate to drive down costs. In fact, when it came to library services, it was very much in the back offices that we could make savings so that libraries could stay open and the public could be served by excellent libraries. We worked very carefully across a whole range of areas, such as highways and helping children across west London who needed safeguarding and support to find potential parents who could look after them, in a way that would not have been possible without collaboration.

I am also a huge fan of mutualisation. I know that is coming up in group 6, but I want to say that as someone who was a pathfinder of the work that my noble friend Lord Maude brought forward. The organisation that was spun out of the council to provide school support services exists today and is trading very well with officers I had as senior officers in Hammersmith and Fulham. They preferred a life outside the council. I pay tribute to that movement. It had real vision behind it. It did not involve competition and was really about empowering people to provide the services that they were already providing in a better and more comprehensive way. I think that was a tremendous pathfinder and I only wish that it could have been rolled out more widely across local government and the public sector.

I probably should have declared my business interests as set out in the register before starting to speak. However, I can honestly tell noble Lords that I have absolutely nothing to do with public procurement in my business life because today it takes a long time. It is really difficult and the barriers to entry are very great. I am sure the purpose of this Procurement Bill is to make sure that public procurement works for the benefit of those services and we can use competition in a sensible way and it can be streamlined. I think the purpose of the amendment from my noble friend Lady Noakes is to ensure that, where local trading companies exist, they will not fall foul of the reasonableness test and things have to be put out to competition. In fact, as a council leader I bought a communications service from the City of Westminster because of the expertise it had in comms. That was an expertise that existed only in Westminster City Council, and I did not think that that needed to go out to competition. So I think we need to be sensible.

As a true loyalist, I support the Government if they can point out how a reasonable test can work to ensure that there is not unnecessary tendering in this instance. Provided I get those reassurances, I am happy to support the Minister in her endeavours to ensure that we sort out these areas and preserve areas such as local authority trading companies that provide an important part of services in local government.

[Baroness Hayman of Ullock (Lab)]

My Lords, I thank the noble Baroness, Lady Noakes, for her introduction to her amendment which was very clearly laid out. Again, I would like to join with other noble Lords who talked about the number of government amendments, not just here but in Committee. People who were here on the first day will probably remember that I was a little bit cross about it. But in response, the Minister has really grappled with our concerns in the lead-up to Report and I appreciate the time that she has spent doing that.

I will be brief. I will just say that we strongly support the noble Baroness, Lady Noakes, with her amendment. She clearly laid out why this is important for local authorities and by including her amendment you increase the efficiency of the public sector when it is structuring the way it delivers its services, much of which do not need to include the procurement laws that we see before us. All I would say is that it is important that we can ensure that local authorities and other public sectors bodies within this area can continue to deliver better public services and make savings, as the noble Lord just mentioned, by collaboration, working together and sharing services. That makes eminent sense, and I would hope that the Minister will be able to reflect on that.

[Baroness Neville-Rolfe (Con)]

My Lords, Amendment 9 tabled by the noble friends Lady Noakes and Lord Moylan—whom I am very glad to see back in this place—seeks to preserve the rules which currently apply to public service collaborations at paragraph 2 and 3 of Schedule 2. It was also very good to hear from my noble friend Lord Greenhalgh with his extensive local government experience.

I agree that the Bill needs to preserve these rules but believe that we have already done so. Paragraph 1(2)—to which the noble Baroness referred—says that a contract is not exempted if the main purpose of the contract could reasonably be supplied under a different contract, and that contract would not itself be an exempted contract. This provision serves to close a loophole where contracts that are mixed—that is that they contain both exempted activities and not exempted activities—might be inappropriately exempted from the regime.

However, unlike the exemptions for specific activities, all types of goods, services and works contracts are capable of being exempted under the vertical and horizontal exemptions, so the second part of the test at Schedule 2(1)(2)(b) is not met. The contract would remain exempt.

While I believe that we have preserved the rules, the Bill needs to be better understood by users and stakeholders. My noble friend Lord Greenhalgh also made some good points about unnecessary tendering. I met the Local Government Association, as I was concerned about this provision, and my officials are engaging with it following its representations to reach a common understanding. They will come back to me with an amendment that could be put forward in the House of Commons to clarify this provision, should one prove necessary. It will take a bit of time. Accordingly, I ask my noble friend to withdraw the amendment.

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[Lord Lansley (Con)]

My Lords, I am most grateful to my noble friend, not least because she referred to Amendment 169 in her helpful introduction to these amendments on utilities. Happily, we have reached the end of the Bill quite early on; that amendment relates to the very last page—page 118—where, in the present draft of the Bill, Commission decisions relating to public contract regulations, utilities and so on were to be repealed. Her explanation is interesting, in that it retains these European Commission decisions as retained EU law for the benefit of the Scottish regime. I am slightly perplexed as to why they were to be repealed in the first place since, presumably, the Scottish regime would have required them for this purpose regardless. However, that is just a question and it is only a matter of curiosity that I ask it.

My Amendment 23 is an amendment to government Amendment 22. As my noble friend made clear, the DPRRC said that this was a skeleton clause and was particularly unhelpful because it disguised the fact that policy had not been developed. I do not know whether that is the case or not; the point is that Ministers have come forward with a proposal for how these exemption decisions should work in relation to utility activities. I remind noble Lords that there are activities, and there are utility activities. The effect of Schedule 2 is to make it clear that certain activities should not be regarded as utility activities because they are in fair and effective competition and there are no restrictions on entry to that market. The decisions that were made were about electricity, gas and oil extraction, production and generation.

That being the case, the policy decisions in government Amendments 17 and 22, which my noble friend has explained, have the effect in Amendment 22 of saying, “These are the existing exemption decisions”. Government Amendment 17 says that, in future, Ministers can add to them or subtract from them by regulation. The point of my Amendment 23 is to ask, “When Ministers were reaching a view as to how these exemption decisions should be made in future, why did they not look at the Competition and Markets Authority, which we have as our own creature for the making of competition-related decisions, and put to it the job of determining whether a given activity in the utilities sector—actually, it would also be true in other sectors if exemption decisions were sought—is in fair and effective competition and there are no restrictions to the market?”

If my noble friend says, “Ah, but when Ministers make regulations, they will of course take advice from the Competition and Markets Authority”, I will be very happy. If she does not say that, however, I will be nervous, because what is the point of having the Competition and Markets Authority able to make such decisions in lieu of what used to be the European Commission’s responsibility if Ministers are going to pre-empt it themselves? I hope that she will be able to give me that reassurance about the use of the CMA for making competition-related decisions.

[Baroness Hayman of Ullock (Lab)]

My Lords, I thank the Government for tabling a lot of the amendments, which have helped to bring clarification around utilities; quite a bit of confusion was expressed in Committee. I also remind the noble Baroness, Lady Neville-Rolfe, who is not currently in her place, that she did say that we should be extremely careful about regulating private utilities in Committee. These amendments seriously have her stamp on them; I thank her for that. The noble Lord, Lord Lansley, made some important points. I hope that the noble Baroness, Lady Bloomfield, listened carefully and can give the reassurances that he requested.

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Moved by

[Baroness Hayman of Ullock]

33: After Clause 10, insert the following new Clause—
“Procurement principles
(1) In carrying out a procurement, a contracting authority must pursue the following principles—(a) promoting the public good, by having regard to the delivery of strategic national priorities including economic, social, environmental and public safety priorities,(b) value for money, by having regard to the optimal whole-life blend of economy, efficiency and effectiveness that achieves the intended outcome of the business case, (c) transparency, by acting openly to underpin accountability for public money, anti-corruption and the effectiveness of procurements,(d) integrity, by providing good management, preventing misconduct, and control in order to prevent fraud and corruption,(e) fair treatment of suppliers, by ensuring that decision-making is impartial and without conflict of interest, and(f) non-discrimination, by ensuring that decision-making is not discriminatory.(2) If a contracting authority considers that it is unable to act in accordance with any of these principles in a particular case, it must—(a) take all reasonable steps to ensure it does not put a supplier at an unfair advantage or disadvantage, and(b) publish a report within 90 days setting out the principles with which it could not act in accordance and its reasons.”Member’s explanatory statement
This amendment would require contracting authorities to pursue a series of principles when carrying out procurements.

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[Baroness Hayman of Ullock (Lab)]

My Lords, I have a number of amendments in this group. First, Amendment 33 refers back to the principles that we debated at length in Committee; they were originally in the Government’s Green Paper and were consulted on. Our concern is that those principles were then left out of the Bill even though the objectives were included, so my amendment

“would require contracting authorities to pursue a series of principles when carrying out procurements.”

Amendments 35 and 36 in my name look to

“require social and public value to be considered in the procurement objectives.”

We believe that social and public value are important requirements for any contracting authority to consider, so I have asked for that to be put through to the procurement objectives. This would encourage anyone contracting, for example, to work with local suppliers; to encourage contractors to reduce their CO₂ emissions; to encourage the hiring of more apprentices; and to encourage greater diversity. If you are going to deliver the levelling up that the Government are so keen on and achieve net zero, it is important to include these principles.

We know that social value is included in the national procurement policy statement but it is not referred to in the Bill itself. We also know that public benefit is mentioned in the Bill, but that is a pretty vague concept. It is not clear to us how social value would sit within that framework.

I also have Amendment 46. We debated at length in Committee the national procurement policy statement. Many concerns were raised about the Government expecting Members to take at face value the fact that certain things can be included in the NPPS, but, of course, we have absolutely no guarantees other than that the Government are saying that they will be. Clearly, once the Bill becomes an Act, we will need to see a new NPPS, so we believe that the Bill should include the set of principles that need to be within that NPPS so we can have confidence that it will deliver what it needs to do.

My Amendment 48 aims to subject the NPPS statement and amendments to the affirmative procedure so that the existing one will remain in force if, for any reason, a new statement is rejected. We think this is an important fallback position.

Finally, my Amendment 96 creates a process to ensure contracting authorities safeguard the public interest when considering whether to outsource or recontract services. This is something that has been raised with us by a number of different contracting authorities that want that flexibility.

There are a number of other amendments in this group which we support, and I will just draw attention to a few. My noble friend Lord Hunt has an amendment on adding accessibility to the objectives. The noble Baroness, Lady Worthington, has an important amendment on defining public benefit. We know how strongly she feels about the environment and, again, we have debated that at length. It is really important that we do not lose that in the further discussions. The noble Lord, Lord Lansley, has a number of amendments that we support, and we look forward to hearing his introduction to them.

Finally, it is really important there is clarity around principles and objectives as this Bill goes through the process of becoming an Act. Good sentiment from the Government and the Minister are not sufficient to ensure that we actually have good procurement at the end of the day. That is what we want to see. I beg to move.

[Baroness Worthington (CB)]

My Lords, I will speak to Amendment 42 in my name in this group and in support of Amendments 46 and 47. I will keep my comments brief. We had a very good debate in Committee about what should go into the Bill in relation to the principles that will guide procurement. In my amendment, I sought to be as precise as possible and selected two specific issues relating to climate change and biodiversity loss. The reason for that is that it has been pointed out to me that society’s priorities shift over time and primary legislation should be regarded as very serious: you therefore should not put a long shopping list of things into it. However, on these two issues, I cannot imagine a time henceforth when we will not be concerned about the impacts of climate change or biodiversity loss. The Government have a huge lever for change to drive investments into solutions. It would be a great shame if we were not to make it very clear in the Bill that this lever is something that we are willing and want to use.

The more the public purse can create markets and drive investment, the more we can rely on the private sector to come forward with innovation. It will bring down the cost over time. If we do not use public procurement, we will be expecting more from our private sector, and it will debatable whether it will be able to enter into markets that are highly mature and overcapitalised. We are not talking about a level playing field here. If you want private solutions to come in, you have to support them either through government policy, through taxation or through procurement. This Bill is a huge lever that I hope we will pull.

Although I would be delighted to test the will of the House of Amendment 42, it is actually more important that we put these principles in on the operational aspects of this Bill, in which case Amendments 46 and 47, which relate to national policy planning guidance, are hugely important, and I support both of those amendments. I look forward to hearing those who speak to them and to the Government’s response.

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This has been a long debate. I believe that I have made a strong case for keeping the framework of the Bill as it is, but obviously it will also be important that the NPPS contains the right policy provisions. I respectfully request that these various amendments be withdrawn following the reassurances I have been able to give.

[Baroness Hayman of Ullock (Lab)]

My Lords, I must say that I am pretty disappointed with the Minister’s response to my amendments, particularly to those on the NPPS. I give notice that I intend to test the opinion of the House on Amendment 46, when we reach it. I also let the noble Lord, Lord Lansley, know that, if he chooses to test the opinion of the House on his Amendment 47, we will support him. In the meantime, I beg leave to withdraw Amendment 33.

Amendment 33 withdrawn.

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Moved by

[Baroness Hayman of Ullock]

46: Clause 12, page 9, line 8, at end insert—
“(aa) give due regard to the following principles—(i) promoting the public good, by having regard to the delivery of strategic national priorities including economic, social, environmental and public safety priorities,(ii) value for money, by having regard to the optimal whole-life blend of economy, efficiency and effectiveness that achieves the intended outcome of the business case,(iii) transparency, by acting openly to underpin accountability for public money, anti-corruption and the effectiveness of procurements,(iv) integrity, by providing good management, preventing misconduct, and exercising control in order to prevent fraud and corruption, (v) fair treatment of suppliers, by ensuring that decision-making is impartial and without conflict of interest, and(vi) non-discrimination, by ensuring that decision-making is not discriminatory,”Member’s explanatory statement
This amendment would require a Minister to consider a set of principles before publishing the national procurement policy statement.

[Baroness Hayman of Ullock (Lab)]

I would like to test the opinion of the House on Amendment 46.

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This Bill presents a vitally useful tool for maintaining or raising standards and preventing good employers being undercut by bad ones. I hope that the Government will take at least something from my proposed amendment.

[Baroness Hayman of Ullock (Lab)]

My Lords, this has been a short debate, but this group contains some very important amendments that the Minister should consider carefully.

I turn first to the amendment in the name of the noble Lord, Lord Fox. He introduced it extremely clearly and explained why he considered it necessary. He made an important point: if you give a contract to somebody who, not a very long time afterwards, is found guilty of the offences outlined in the noble Lord’s amendment, what recourse is there for other people who have bid for that contract and behaved perfectly properly? We know that contracts are often given for a number of years, so this is likely not to be something that happens once in a blue moon; it could become a problem. If the Minister is not inclined to accept the noble Lord’s amendment, I ask her to take his concerns back to her department to see whether there is another way to have some kind of recourse or review if such a situation were to arise.

My noble friend Lord Hendy’s amendment is incredibly important because, as he rightly said in introducing it, we have Clause 29, which looks at excluding suppliers for improper behaviour—he listed many of the improper behaviours that are included in this—but what is not included is what happens if the rights of an employee or worker are breached. Surely the rights of those who work on contracts and work for people should be fully supported by the Government. We have laws on employment rights for a purpose. Surely, in looking at procurement and who to give what are often extremely lucrative contracts to, this Bill should consider employees’ rights and ensure that companies that have behaved improperly by breaching employment rights are excluded.

This seems a very straightforward amendment to add to the Bill. It would give employees more confidence and would give people who are looking to employ people confidence that they are treating their workforce in the way the law of our country dictates. I urge the Minister to support this amendment.

[Baroness Neville-Rolfe (Con)]

My Lords, I thank the noble Lord, Lord Fox, for Amendment 89 on financial and economic misconduct. The amendment would permit the exclusion of suppliers where there is evidence of certain economic and financial offences. Of course, suppliers who commit fraud, bribery and money laundering and have failed to self-clean have no place winning government contracts. There are already mandatory grounds for exclusion that cover the most serious offences of this nature, as set out in Schedule 6. It is worth noting that the scope of economic and financial offences covered is significantly wider than in the EU regime that it replaces, including a broader range of theft, fraud and money laundering offences.

However, the mandatory grounds in Schedule 6 rightly require the supplier or a connected person to have been convicted. By providing for exclusion without the requirement for a conviction, the amendment would require authorities to make a judgment as to whether there is sufficient evidence that offences have been committed in order to apply the ground. They would need to make this judgment at a point when the investigating authorities have not reached a view, which would be very difficult. The exclusions regime requires all grounds to be considered in respect of every bidder in a procurement, so authorities would have no choice about whether to consider these matters.

I thank the noble Lord for drawing our attention to the review of finance and corruption in local government. The recommendation in that review was that we consider whether this proposal is feasible. We have given it careful consideration but are not taking it forward, for the reasons I have already touched on. However, I would add that the very fact pointed out by the noble Lord—that investigations by the authorities into these matters, which can apply to many different areas of regulation, often take considerable time—speaks to the complexity of making these judgments within the contracting authorities. There is no reason to think that they would find this any easier than the relevant and proper authorities. In fact, they would find it harder, so it would be a new burden on those investigating suppliers—it could be a significant one—and on suppliers themselves, which I am unwilling to impose.

I turn now to Amendment 91A, tabled by the noble Lord, Lord Hendy, which introduces a discretionary exclusion for “significant” breaches of workers’ rights. I pay tribute to the noble Lord’s work in this area. In my view, the exclusion grounds already cover the most serious breaches of workers’ rights, so the mandatory grounds in Schedule 6 include slavery and human trafficking offences, offences relating to employment agencies and gangmasters, and refusal or wilful neglect to pay the national minimum wage. These are based on the serious labour offences within the purview of the director of labour market enforcement.

The amendment begs the question of what constitutes a “significant” breach. Unless there is a settled consensus on this point, which I am not aware of, it will be difficult for both suppliers and contracting authorities to interpret. We should remember that suppliers will need to self-declare whether they are subject to any of the grounds, and that contracting authorities will need to consider whether suppliers meet the grounds in each procurement that they run. That is quite wide-ranging in relation to employment rights. Questions of whether a breach is significant, and, indeed, whether it relates to rights derived from statute, common law or international obligations, will consume a disproportionate amount of time and resources. I do not doubt that there are a number of behaviours in different areas which the exclusion grounds we have set out might or might not cover; but the purpose of the exclusions regime is to protect against suppliers that may be fundamentally unfit to compete for public contracts. It is not a means to enforce employment rights, or a lever to incentivise certain behaviours.

What we have introduced in this Bill is a much tougher regime of debarment, with central resources devoted to assessing suppliers and deciding centrally on debarment. This is tough for direct and indirect suppliers, as one bad apple in a company can cause them to be debarred—a very strong incentive to ensure that bad behaviour does not occur in the first place, of course; or, where it does, to take remedial action. However, expanding the exclusion grounds, as proposed in this amendment, will have a chilling effect on engagement in procurement, as I explained from a business perspective before I became a Minister and turned into the gamekeeper. We must be fair and remember that we have an interest in more competitive markets that improve value for money, innovation and productivity. I am grateful to those who have spoken for raising these issues. However, I believe we have done enough in Schedule 6, and I respectfully ask the noble Lords, Lord Fox and Lord Hendy, not to press their amendments, given the lateness of the hour.

The noble Baroness, Lady Hayman, raised a new point about the carry-on consequences of the issues we have discussed in this group. I am not sure that we can do anything about that, but I will certainly have a look at that as the Bill progresses. I beg to move.

Procurement Bill [HL]

Baroness Hayman of Ullock Excerpts

Committee stage
Wednesday 26th October 2022 Grand Committee

[Lord Fox (LD)]

My Lords, as the noble Lord, Lord Mendelsohn, pointed out, this is a wide range of varying amendments on a scale that, I suggest, is suboptimal for the proper scrutiny of this Bill. Frankly, it is symptomatic of the whole nature of this Bill and the way in which we are expected to scrutinise it. That said, because there are so many different things in here, there is a danger of some of the gems getting buried. I am going to burnish just a few of them but I hope that the Minister will be able to look back through the Marshalled List and Hansard to make sure that they are not overlooked, even if she is unable to comment fully on the whole range of amendments.

Those of us who can remember the beginning of this group will remember that we were talking about KPIs. The noble Lord, Lord Lansley, the noble Baroness, Lady Noakes, and my noble friend Lord Scriven, talked about them, as will I when I speak to Amendments 275A and 276ZA—I have never seen a “ZA” before—in my name.

Amendment 275A would remove the power granted by the Bill to the appropriate authority—otherwise known as the Secretary of State, as far as I understand it—to change the threshold at which KPIs may be published. At the moment, the threshold is set at £2 million. If my noble friend Lord Scriven, the noble Baroness, Lady Noakes, and the noble Lord, Lord Lansley, were successful in changing the KPI regime and making it rigorous, the Secretary of State could at a stroke remove a large proportion, if not all, of public procurement from that KPI obligation simply by arbitrarily lifting the threshold. This is a process that should not be left to the Secretary of State alone; that is what Amendment 275A refers to.

Furthermore, Amendment 276ZA would ensure that the regulations could be used only to reduce the threshold, not increase it. I must say, it is ingenious; I would not have thought of it on my own account. These are well-worded and reasoned amendments. I am sure that, if the Minister were not at the Dispatch Box, the Back-Bench version of her would have been making this speech because these amendments are of course hers. When she was promoted, she swiftly withdrew them. Because I agree with them and think that they are good amendments—I did not do this simply to have some fun; these are important issues—I put them back in for your Lordships to consider. The threshold at which the KPIs are published is absolutely central to whether we have a KPI system that works. It is important that Parliament is left with the right to do that.

I shall speak to another gem: Amendment 272 in the names of my noble friends Lord Wallace and Lord Scriven and the noble Baroness, Lady Bennett. I will not speak at length. In previous debates, Ministers have argued against adding principles and things to this Bill, but central to the Green Paper was a section on the principles of public procurement. The Government accept that there should be principles here and have advanced some, so putting into the Bill the principle that procurement should help local communities with the deployment of sustainable local improvement would seem to be central to what this Government want to do, especially given their stated aim of bringing local communities and the quality of life in them up.

I also associate myself with my noble friend Lord Scriven’s speech on Amendment 353AA; it sounds more like a battery than an amendment. I look forward to his further speech on that.

Finally, I want to say a word in favour of the amendments in the name of the noble Lords, Lord Mendelsohn and Lord Aberdare, which seek to address further the pernicious practice of late payment. This is the Procurement Bill and it is about public procurement. It is unthinkable to me that this Bill and the Act that will follow do not have something to say about late payment and something to improve this activity. Whether it will be along the lines of the noble Lords’ proposal, I do not know, but these are important points. This seems to be a genuine opportunity for the Minister. This is a cross-party concern. I am sure that the Minister, working with others, can come back on Report with something that will further stiffen the process. I suggest that the process of publishing, as set out by the noble Lord, Lord Mendelsohn, would be a very good way of starting so that we can at least see where the poor behaviour lies.

I hope that, in the post-Committee quiet, the Minister can scrutinise where we are with all these amendments and come forward on Report with some sensible improvements based on them.

[Baroness Hayman of Ullock (Lab)]

My Lords, this has been an interesting debate that I hope has been helpful to the Minister. I have three amendments in this group. Amendment 273 requires that one KPI is compliant with the carbon-reduction plan. Tied into that is Amendment 274, which requires that, where public contracts in scope of the KPIs fall below the threshold for mandatory carbon-reduction plans, at least one KPI should assess the supplier’s performance against climate or environmental considerations.

As I said on Monday, the transparency requirements are very welcome. We believe they could provide the opportunity for contracting authorities and their suppliers to demonstrate that they are having regard to climate change and are managing the risks through regular environmental reporting as a KPI. However, those requirements are not set out in the Bill but will be left to secondary legislation. For example, they do not impose requirements in relation to the environmental commitments made by the supplier awarded the contract or for the regular reporting on whether the commitments have actually been met. We feel that that needs to be strengthened, which is why we have tabled the two amendments on this area.

My Amendment 353AA would create the process to ensure that contracting authorities safeguard the public interest. I thank the noble Lord, Lord Fox, for his support. The noble Lord, Lord Scriven, gave a detailed explanation of the importance of this, so there is no need for me to go into any further detail. Looking at the public interest and the wider potential impacts of any contracts that are supplied is something that we need to be extremely aware of and cautious about.

I turn to other amendments in this group. The noble Lord, Lord Lansley, made some important points here; we are very sympathetic to them and I would be interested to hear the Minister’s thoughts. These seem to be straightforward areas where the Bill could be improved. In particular, the noble Lord explained how the time modifications, going from one-10th to one-sixth, made sense and would make life a lot easier for people. Again, these are sensible amendments so it would be interesting to hear the Minister’s response.

My noble friend Lady Thornton has tabled some amendments around KPIs and social value, and we strongly support both of them. I am sure the Committee is aware that social value is included in the national procurement policy statement, but there is no reference to social value in the Bill itself, as has been said on a number of occasions when we have debated this in Committee. We have been told by officials—and by previous Ministers before the noble Baroness—that social value is integrated into the concept of public benefit, but we believe that “public benefit” is just too vague a concept and it is just not clear where social value sits within this framework. My noble friend raises an important point with her amendments, and I hope the Government will start to take this issue more seriously.

As usual, the noble Baroness, Lady Noakes, put her finger on an area that needs proper clarification. I am sure the Minister will have listened very carefully to everything she said.

The noble Lord, Lord Scriven, introduced some of the Liberal Democrat amendments by talking about the importance of sustainable local improvements and, again, the wider public benefit: what is this, what does it mean and what will we get out of it in the Bill? Again, a lot of what he was saying—and what the amendments from the Liberal Democrats are doing—is very similar to, and ties in with, the amendments we have put down: they look at the environmental and social value impacts and how we can build these into the Bill to make important improvements.

The noble Baroness, Lady McIntosh of Pickering, made some important and specific points with her amendments, and I was happy to add my name to them. They draw attention to a really important issue, which has been missed out and is extremely pertinent at the moment when we consider current concerns over inflation—particularly food price inflation, as she mentioned—and the rise in prices more generally. Public sector catering businesses were really badly hit during the pandemic and are still struggling, so we need to pay proper attention to her amendments. If we are genuine about supporting SMEs, this is an area where they really need some strong support from the Government at the moment.

I commend my noble friend Lord Mendelsohn for his work on tackling the issue of late payment. His dogged approach to this has achieved much, but there is still much more to achieve. His amendments are very important and helpful; again, they are about helping SMEs, something the Minister has said time and again she wants to do.

As the noble Lord, Lord Fox, asked, why is there nothing on late payments, or the issues he raised in particular, in the Bill? This is a real opportunity to do that. The noble Lord, Lord Aberdare, raised similar issues around small and medium-sized businesses and the kind of support they need for procurement if they are to be able to make the most of the contracts that are out there for them. I totally agree with him on the issues around SMEs and the construction sector: it can be very difficult for SMEs to break into that sector, and very difficult for them to manage their cash flows if they start having issues around late payment, which unfortunately happens all too often. In addition, we would strongly support his request for picking up the meeting idea to see whether we can make some progress on this matter between Committee and Report.

To summarise, the Bill needs to ensure that it specifies that KPIs are flexible, proportionate, realistic, agreed properly with the provider and informed by engagement with the people accessing any services. These are helpful amendments, seeking to achieve many of these aims. I hope that the Minister is sympathetic to much that has been proposed and I look forward to her response.

[The Minister of State, Cabinet Office (Baroness Neville-Rolfe) (Con)]

My Lords, I am glad to be debating this group, which deals with prompt payment of suppliers throughout the supply chain, an important innovation in the Bill to deal with a long-standing problem. I am slightly perplexed by the words of the noble Lord, Lord Fox, because one of the advantages of the Bill is that we are making progress on prompt payment and adding rules in relation to the indirect suppliers, which is a considerable breakthrough.

There are a number of government amendments. Amendments 354 and 434 confirm the start of the period during which payment must be made following receipt of an invoice. Amendment 361 signposts the reader to an electronic invoicing provision in Clause 63. Amendments 360, 362, 363, 431 and 432 align wording with equivalent provisions elsewhere. Amendment 433 corrects the territorial application of this regulation-making power in Clause 80.

I now turn to government amendments to Clauses 69 and 70 and Schedule 8 on contract modification. Amendments 365 to 371 to Clause 69, “Modifying a public contract”, have been made to correct technical errors and make the clause clearer. Many of the amendments to Clause 70—I reference Amendments 390, 391 and 392A—arise as a consequence of the decision to divide this clause to make it simpler for contracting authorities to understand their publishing obligations.

Amendment 372 has been made to ensure that contract change notices are published when a contract is transferred to a new third party under paragraph 9 of Schedule 8. Amendments 373 and 374 clarify the anti-avoidance provisions. Amendment 375 creates a new paragraph (b), which reduces the burden of publication. Amendment 376 sets out certain contracts that are exempt from the obligation to publish contract change notices. Amendments 377, 381 and 385 are consequential. Amendments 378, 380 and 383 have been made to ensure that the clause will work effectively for Wales and Northern Ireland. Amendment 384 and 389 provide that certain other contracts are exempt from the requirement to publish details of a qualifying modification.

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[Baroness Brinton (LD)]

My Lords, I will speak to Amendment 436, from the noble Lord, Lord Lansley, and to my noble friend’s Amendment 441. It is a pleasure to follow both of them.

I want to talk a bit about some of the problems that we face inside our own government structures and Parliament. The noble Lord, Lord Lansley, and I spent quite a bit of time earlier this year on the Health and Care Act. Indeed, there was a section in there about healthcare arrangements with other countries. But that was the end of a story, and at each stage from 2014 onwards we kept finding people trying to relax the EU directive on procurement rules, which we had to abide by then, in order to enlarge the gift that we could give under a treaty. For health, this is an extremely important matter.

The EU procurement directive, which governs all public sector procurement in member states, defines fair process and standards to ensure that all businesses, including the NHS, have fair competition for contracts. It also, incidentally, prevents conflicts of interest through robust exclusion rounds and protects against creeping privatisation. It is that latter point that is really important in particular for the NHS, but there are other sectors of the public realm where that matters too.

On 18 November 2014, I asked the noble Lord, Lord Livingston of Parkhead, whether the EU procurement directive protected the NHS. He replied:

“Commissioner de Gucht has been very clear:

‘Public services are always exempted ... The argument is abused in your country for political reasons.’”

The noble Lord, Lord Livingston, went on to say:

“That is pretty clear. The US has also made it entirely clear. Its chief negotiator—

this was in relation to TTIP—

said that it was not seeking for public services to be incorporated. No one on either side is seeking to have the NHS treated in a different way … trade agreements to date have always protected public services.”—[Official Report, 18/11/14; col. 374.]

Again in 2018, I raised these points with the noble Lord, Lord O’Shaughnessy, in a debate and he said:

“I can tell them that we have implemented our obligations under the EU directive. The Government are absolutely committed that the NHS is, and always will be, a public service, free at the point of need”—


and the current Government repeat that point.

“It is not for sale to the private sector, whether overseas or here. That will be in our gift and we will not put that on the table for trade partners, whatever they say they want.”—[Official Report, 29/3/18; col. 947.]

That was very helpful because it came in advance of President Trump’s attempt to broaden what could be in a possible trade agreement, which would definitely have included health. Those of us who are concerned about these matters therefore relaxed a bit, until the Healthcare (International Arrangements) Bill came before your Lordships’ House, which was intended to replicate the reciprocal healthcare arrangements that we used to have under EHIC. The problem was that it had a clause that also gave rights under international trade agreements for health services to be part of those trade agreements, with no reference back to Parliament. It was an expedited process but, during the passage of that Bill, we managed to revert to it being just about reciprocal healthcare arrangements in the European Economic Area and Switzerland.

However, this year, we went through exactly the same process again when the Health and Care Bill was introduced, as it contained a much looser series of clauses that would have allowed health to become part of trade agreements. During the Bill’s passage, a cross-party group of Peers fought very hard and were really grateful that the Government recognised the risk that they were putting the NHS under and conceded. Now, the provisions under the Health and Care Act are the equivalent of EHIC but for other countries.

I wanted to raise these points because it seems to me that we must have Parliament’s involvement before things are signed and sealed. We also need to let those people who are negotiating our trade agreements understand where some of the clear red lines remain across Parliament—and certainly across this nation—for certain public services, including the NHS.

[Baroness Hayman of Ullock (Lab)]

My Lords, I shall be very brief, as time is ticking away. I start by saying that we completely support Amendment 436 in the name of the noble Lord, Lord Lansley. It is really important to get proper reassurance and clarification in this area, and I hope that the Minister will be able to give that to us today.

We also absolutely support what Amendment 441, in the name of the noble Lord, Lord Purvis, is trying to do. Environmental, social and labour conditions are incredibly important when looking at who you are procuring with. The noble Lord introduced it very thoroughly, so I will not go into any further detail, but he is absolutely right that we need clarification on this.

One thing I have found with this Bill is that different bits are cross-referenced all the way through and, on occasion, I have got somewhat confused, to say the least. This might not be important at all but I ask for some clarification. Schedule 9 is on the various parties with which we have trade agreements, and we have been talking about trafficking, slavery, exploitation and so on, which are all mentioned in Schedule 7. We welcome the fact that Schedule 7 covers all these areas, but paragraph 2 of that schedule says that engaging in conduct overseas that would result in an order specified in paragraph 1—trafficking, exploitation, modern slavery and so on—if it occurred in the UK constitutes a discretionary ground for exclusion from procurement. Does that conduct overseas, as referred to in Schedule 7, cover anything that happens with procurement coming out of a trade agreement? That is what I do not understand. If it does, it alters what we have just been talking about. If it does, how does that operate and how is it enforced? Who manages it? If it does not, how do we address that when we are negotiating trade agreements in order to achieve the outcomes that we would all like to see? It may be that the Minister does not know and needs to talk to officials, but that is something on which I would like clarification.

[Baroness Neville-Rolfe (Con)]

My Lords, this group seeks to deal with amendments relating to treaty state suppliers. There are three minor government amendments either to improve the drafting or to ensure the proper functioning of the clauses, Amendments 438, 440 and 442. As the time is late, I will not go into detail, but I am happy to explain them to noble Lords on another occasion if they wish.

Amendment 436, tabled by my noble friend Lord Lansley, proposes that regulations could be made only in relation to agreements that had been laid before Parliament under the Constitutional Reform and Governance Act 2010. The use of regulations in the Procurement Bill in relation to implementing international agreements is limited to two circumstances. The first is to give effect to the procurement aspects of new trade agreements. For these, the Committee will know that treaties requiring ratification follow the established domestic scrutiny process set out in the CRaG Act. However, not all agreements will necessarily require ratification, and the amendment would place the implementation of such agreements outside the scope of this power. For the agreements that fall within the Act, the Committee will be aware that the Government have previously made commitments in our response to the International Agreements Committee, of which my noble friend is a prominent member, concerning the submission of international agreements to Parliament for scrutiny.

The second set of circumstances is to give effect to any changes to trade agreements over their lifetime. These are envisaged to be small technical changes, such as updating schedules following machinery-of-government changes or modifications to market schedules. In such circumstances, those more administrative matters may not trigger the CRaG procedures and, as such, the amendment would prevent them being implemented using this power. Any such updates and modifications would therefore require new primary legislation to implement, at a huge cost in time and resources. However, I reassure noble Lords that the Government intend to keep the relevant Select Committees aware of any changes during the life cycle of a free trade agreement.

Amendment 441, tabled by the noble Lords, Lord Purvis and Lord Wallace, seeks to provide that a contracting authority does not discriminate against a treaty state supplier if it takes into account environmental, social and labour considerations and indicates in the notice of intended procurement or tender documentation how such considerations are defined. The impact of this would be that a contracting authority could, within the rules, apply environmental, social and labour considerations in a way that breached a treaty state supplier’s entitlement to no less favourable treatment, and that would risk breaching our international obligations. For example, if a contract can be delivered remotely from an overseas base, our obligations to ensure no less favourable treatment for treaty state suppliers mean that it would not be appropriate for a contracting authority to require socioeconomic or environmental criteria that could not be performed from overseas. However, I assure the Committee that the Bill as drafted allows contracting authorities to include social, environment and labour considerations when setting award criteria, as long as they are non-discriminatory.

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[Baroness Neville-Rolfe (Con)]

That would be helpful. We can certainly look at Hansard and write a letter, but we should get together in the next 10 days or so to try to sort this out, because it is complicated—that was clear from being at the briefing.

The noble Lord asked one or two questions which I can clarify. Schedule 9 lists countries, states or regions with which we have an agreement that covers procurement —obviously, that is the purpose of that schedule. All the agreements in that schedule are binding; in contrast, obviously MoUs are not legally binding. On the Colombia agreement, any human rights obligations in the Andean trade agreement will have been reviewed by the CRaG process before it came into force—I think that was probably accepted—and the procurement chapter in trade agreements must be complied with unless these agreements are breached and coverage withdrawn.

Following that agreement with the noble Lord, I move on to Amendment 443A, tabled by my noble friend Lady McIntosh, which proposes to remove the power of a Minister of the Crown to make regulations under Clause 83. Under current drafting, either a Minister of the Crown or a Scottish Minister is entitled to make regulations to ensure that treaty state suppliers are not discriminated against in Scotland in relation to devolved procurement. The use of these concurrent powers would allow either the Minister of the Crown or a Scottish Minister to legislate with respect to devolved procurements in Scotland in order to implement new and existing international trade agreements. Similarly, concurrent powers were used in Section 2 of the Trade Act 2021. Of course, the power would not prevent Scottish Ministers legislating in respect of devolved procurements. However, in the event that they chose not to do so or if they wished, perhaps for reasons of efficiency, to allow a single set of regulations to implement a new trade agreement, this power would allow a Minister of the Crown to pass the necessary legislation. I should say that we continue to engage with the Scottish Government on this and other matters; your Lordships will have seen that the new Prime Minister has indeed spoken to the First Minister since his appointment.

I think we have probably debated this as much as we can this evening.

[Baroness Hayman of Ullock (Lab)]

Can the Minister clarify the question around Schedule 7 or will we perhaps discuss that when we get together at the meeting?

[Baroness Neville-Rolfe (Con)]

I think the greatest brains behind me have not managed to answer the noble Baroness’s question—she has bowled another good ball. Perhaps we can add that to the list for our discussions.

With that, I hope that the noble Lord will withdraw his amendment.

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These amendments seek to move important decisions in Clause 110 to a more affirmative or super-affirmative process. It is quite simple. It is something that the Minister has spoken for on many occasions. This is an important and far-reaching clause that otherwise leaves the Minister almost unchallengeable. These two amendments would simply move things back to where they should be: giving Parliament a better say over changes to the regulations set out in Clause 110. It is as simple as that.

[Baroness Hayman of Ullock (Lab)]

I will be brief. First, let me say that we absolutely support Amendment 491, tabled by the noble Lord, Lord Wigley, which raises a very real concern. It strikes me that his amendment is quite simple and practical, and would easily resolve the concerns that the Welsh Government have here. It does not seem that it would be onerous for the Government here in Westminster so I hope that there will be some real consideration of it ahead of Report.

We also support the two amendments tabled by the Liberal Democrats. Again, it seems that this is the right way to go about making legislation, and we support them.

When I was looking at Amendment 527 in the name of the noble Lord, Lord Lansley, I had a vague thought that this had been discussed before, but Second Reading seems such a long time ago now. I picked up my scribbled-on copy of the Bill and looked at the relevant bit. I had highlighted it and written, “See Lord Lansley, Second Reading”, so it clearly had an impact on me. It struck me what he said at that stage; thinking about it since, I completely understand where he was coming from and believe that he is correct in what he says. This is something that needs sorting out. Otherwise, we are going to end up in a bit of a pickle, to be honest. Again, it would be good if this could be ironed out before we get to Report.

[Baroness Bloomfield of Hinton Waldrist (Con)]

My Lords, I should say at the outset that it appears from the debate and earlier conversations we have had in Committee that this is rather a work in progress. Conversations with the Welsh Government continue and we appreciate the collaborative nature of those discussions. I just thought I would put that on the record before I start on the formal part of my speaking notes.

This group seeks to deal with amendments relating to regulations. First, I will briefly address the government amendments in this group. There are three of them: Amendments 496, 518 and 533, all of which are minor technical amendments to optimise precision in meaning or cross-referencing to other legislation.

Amendment 491, tabled by the noble Lord, Lord Wigley, the noble Baroness, Lady Humphreys, and the noble and learned Lord, Lord Thomas of Cwmgiedd, seeks to extend further the competence granted under the Bill to Welsh Ministers to exercise powers in respect of certain Welsh authorities. The noble Lord, Lord Wigley, mentioned the example of rivers; I note that housing associations could be another, as they may be funded by the Welsh Government but operate across borders. We are cognisant of the various issues this could give rise to.

Clause 99(3) already sets out that, in addition to the authorities whose procurement is within devolved competence under the Government of Wales Act, certain cross-border bodies exercising functions predominantly in Wales should fall under the regulatory control of the Welsh Government when—and only when—they are awarding a contract wholly in relation to Wales. This is an extension of the position in the Government of Wales Act.

This amendment would further extend regulatory control to cover cross-border bodies in respect of contracts for the purpose of exercising a function mainly in respect of Wales, as well as wholly. Noble Lords will be aware that we have worked very closely with the Welsh Government throughout the development of this Bill. The position on cross-border bodies was developed at the request of the Welsh Government to accommodate a small number of Welsh authorities which carry out limited operations in England. It is not unreasonable to provide that where a cross-border body carries out a procurement which extends across borders the rules for reserved procurements should apply. However, I reassure noble Lords that we will continue to work through all outstanding issues in discussion with the Welsh Government.

The noble Baroness, Lady Humphreys, went further on the Bill seemingly allowing English procurement rules to take precedence over Welsh laws. That is not the intention of the Bill. These are not English rules but UK rules, and it is not unreasonable, as I have said, to provide that where a procurement by a cross-border body extends across borders, reserved rules apply. In this Bill, we feel that we have gone beyond the position settled in the Government of Wales Act 2006 and reinforced in the Wales Act 2017, where competence for procurement was specifically addressed. This Bill confers greater powers on the Welsh Ministers. As I have said, conversations continue between the two Governments and I am sure that we will find a resolution.

Amendment 527 limits the repeal of the Trade (Australia and New Zealand) Bill to those provisions in the Bill at its introduction, so does not apply to any amendments made to that legislation during its parliamentary passage. My noble friend Lord Lansley has already drawn the Committee’s attention to an amendment on Report in the other place. Any amendments made by the Trade (Australia and New Zealand) Bill will be in relation to the existing procurement regulations to ensure that they are compliant with the Australia and New Zealand free trade agreements. That will allow the UK to bring those agreements into force before the regime established under this Bill comes into force.

When this Bill comes into force it will ensure our continued compliance with these and other trade agreements. At that point, the Trade (Australia and New Zealand) Act will no longer be necessary and can be repealed. This does not in any way diminish the merits of debating the Trade (Australia and New Zealand) Bill or the importance of any regulations made under it, which will ensure compliance with the procurement provisions of those free trade agreements until this Bill comes into force.

We do not believe that the amendment of this provision is currently necessary, but if amendments are adopted in the Trade (Australia and New Zealand) Bill, we will reconsider the position. We have all agreed that we will add that to the list of discussion topics with the noble Lords opposite as well.

Finally, Amendments 529 and 531, tabled by the noble Lords, Lord Wallace of Saltaire and Lord Fox, would have the effect of requiring the super-affirmative procedure to be used for the first set of regulations under Clause 110(4)(a) to 110(4)(r). The super-affirmative procedure has its place, but it must be used in appropriate and proportionate circumstances. It is not appropriate or proportionate for this exceptional procedure in this case. These regulations are uncontroversial. While I recognise that some are Henry VIII powers, they address matters that are predominantly administrative by nature. They are not sufficiently controversial or significant to merit the disproportionate use of parliamentary time inherent in the super-affirmative procedure. An example would be specifying the content of particular forms that needed to be filled out which contracting authorities must complete, and when authorities provide information to the marketplace about contractual requirements.

Finally, I remind noble Lords that the Delegated Powers and Regulatory Reform Committee did not suggest any need for the super-affirmative procedure, which should give some reassurance. I therefore respectfully request that these amendments be withdrawn.

Procurement Bill [HL]

Baroness Hayman of Ullock Excerpts

Committee stage
Monday 24th October 2022 Grand Committee

These amendments are absolutely crucial. Whether they are strong enough, I am not quite sure, but I urge the Government to listen to the words of the chair of the Committee on Standards in Public Life.

[Baroness Hayman of Ullock (Lab)]

My Lords, I also start by welcoming the Minister to her new role. I thank her and her officials for having a useful meeting with us ahead of today. Let me say how pleased we are to have a Minister who is genuinely interested in this Bill. The noble Lord, Lord Fox, talked about the Minister’s previous involvement; I am sure that her knowledge and interest will lead us into a better place.

I will start with the two amendments in the name of my noble friend Lord Hunt of Kings Heath, Amendments 177 and 180, to which we offer our strong support. Clearly, all of us should embrace anything we can do to tackle tax abuse and tax avoidance. I hope the new Government—we are looking forward to hearing what they have to say—will prioritise this area.

My noble friend talked about Amazon, the lack of accountability and the kind of poor practice that is replicated by many companies, and gave a thorough explanation of why the legislation in front of us could be used to make a difference to cases of tax avoidance and abuse. I hope the Minister listened to those concerns seriously and considers whether this Bill is an appropriate vehicle to address them.

The noble Lord, Lord Fox, introduced a number of amendments in the name of the noble Lord, Lord Wallace, to which I have added my name. I will not go into them in detail, only to say that we support incorporating evasion of criminal sanctions into the Bill. The failure to prevent bribery offences has been incredibly disappointing, and the Bill could be used to tighten that up and make more progress. Also clearly disappointing are the very few convictions there have been under the Proceeds of Crime Act. How can we use this Bill to make a difference in these areas where there is still concern? I am sure all noble Lords agree that we need to ensure proper and effective enforcement to curb any serious wrongdoings in these areas.

Briefly on Amendments 323, 326 and 327, in the name of the noble Baroness, Lady Noakes, she clearly introduced something that I had not really considered until I read these amendments. Again, “considered” is the important word here. She is absolutely right that you need to think about the strength of a subjective test and how it would be interpreted. I completely agree with her; we need to understand this better. I would be interested to hear from the Minister on this, because the noble Baroness, Lady Noakes, is correct that judicial review is simply not a practical option for SMEs; it just is not. How will this be interpreted and managed through the Bill? I look forward to the Minister’s responses.

[The Minister of State, Cabinet Office (Baroness Neville-Rolfe) (Con)]

My Lords, I thank all noble Lords for their kind welcome on my appointment as Minister of State at the Cabinet Office. I echo the words of the noble Lord, Lord Hunt, about my predecessor, my noble friend Lord True, and his willingness to engage—a model I will try to follow. I am very much in listening mode today, as we are still in Committee, working on the Bill.

I am poacher turned gamekeeper, and that can be a good qualification. As noble Lords know, I have consistently taken a keen interest in the Bill, although from a slightly different perspective. I will not delay you with a long introduction, but I am pleased that the Bill consolidates 350 EU regulations. That is simplification at a stroke: it streamlines public procurement and reduces burdens on business, and it turns EU-based law into UK law, which is why we can be confident of its progress.

In particular, it will benefit SMEs, for which we must do our best to offer a level playing field, so that they can increase their share of the £300 billion spent by public authorities each year. I think the noble Baroness, Lady Bennett, will agree with that. I am also looking forward, if I get the chance, to rolling out training on the Bill—simple, clear, comprehensive training in central and local government, and elsewhere. That will answer some of the concerns that I and others across the House have had on the Bill.

I thank noble Lords for their contributions on the grounds for financial exclusion and will try to respond constructively. I begin with Amendments 177 and 180 tabled by the noble Lords, Lord Hunt and Lord Hain. These seek to ensure that the suppliers who fail to provide contracting authorities with various details in relation to their tax affairs when bidding for contracts must be excluded from procurements. I should start by making it quite clear that the Government expect businesses to take all necessary steps to comply with their tax obligations.

However, noble Lords will know that the basis on which contracts must be awarded under the Bill is by reference to award criteria that relate to the contract being tendered, not to other matters such as where a supplier pays tax. This is the right principle to deliver value for money for the taxpayer and ensures that suppliers are not required to provide swathes of information that is irrelevant to the contract. This principle is also a feature of the UK’s international obligations, notably under the WTO government procurement agreement. It is for His Majesty’s Revenue and Customs to enforce the law on tax and, indeed, UK-based multinational enterprises are required to make an annual country-by-country report to HMRC. I note what was said by the noble Lord, Lord Hunt, about Amazon.

The grounds for exclusion in the Bill focus on criminal convictions and other serious misconduct that raises a risk to public contracts, including, importantly, in relation to tax. But investigation does not mean guilt in this country. Exclusion is not a substitute for a judicial process. It is important to let due process run its course before subjecting suppliers to mandatory exclusions.

However, we have broadened the scope of the current regime with the mandatory exclusion grounds related to tax in Schedule 6, which cover all tax evasion offences and involvement in abusive tax arrangements. This is a significant broadening from the current regime, which is limited to where there has been a breach of tax obligations and lets suppliers off where they have repaid or committed to repay unpaid tax. I am confident that these grounds are sufficient to protect contracting authorities and taxpayers.

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[Lord Lansley (Con)]

I hope it is but it does not say so, whereas the 2015 regulations make it clear that it is. I wonder whether this will be an entirely electronic system.

[Baroness Hayman of Ullock (Lab)]

I shall be extremely brief as the noble Lord, Lord Fox, has already covered a lot of the concerns that your Lordships feel. Following on from that, we need some clarification around the issue, as the noble Lord, Lord Lansley, just said, of whether it is or is not entirely electronic. How is that going to operate? What are the conditions of membership? We need some clarification on the detail of how the dynamic markets are going to work. Perhaps the Ministers opposite could write to the Committee with some clarification about the operation of the system ahead of Report. That would be very helpful.

[Viscount Younger of Leckie (Con)]

My Lords, I appreciate the comments made by the three Peers who have spoken. It might be appropriate for me to write a letter to clarify the detail, which I appreciate came across as rather technical—though not too rushed, I hope. I appreciate the questions asked by the noble Lord, Lord Fox, my noble friend Lord Lansley and the noble Baroness, Lady Hayman; I will attempt to answer some of them.

Let me start by saying that the expression “dynamic market” is not just a name change. The dynamic market will have a wider remit than the current dynamic purchasing systems. Importantly, dynamic markets can be used for all procurements rather than just commonly used goods and services. That is the first change. The Bill also provides much greater clarity on how dynamic markets can be established and contracts awarded to suppliers—this is on-the-ground information—and on how contracts can be awarded to suppliers that are members of the dynamic market, as well as increased transparency over their operation. I hope that helps to some extent.

I shall go further in answer to the questions asked by the noble Lord, Lord Fox. The benefit of frameworks is that, once set up, they can be a fast, efficient, compliant and easy-to-use procurement route for both the contracting authority and the suppliers. Again, once the framework is set up, there is a significant reduction in the procurement timescale from six to nine months to as little as four to six weeks, leading to reduced procurement costs. Obviously, that is beneficial for both the public sector and the suppliers.

With this, there are pre-agreed terms and conditions, meaning that contracting authorities can simply call off the framework to meet their requirements. They are usually set up with ceiling prices that can be further reduced by competition at the call-off stage. So the benefit of the dynamic market is that it remains open to all suppliers, which benefits SMEs in particular as they will not be locked out for long periods of time.

On how dynamic markets actually help companies—let us say SMEs, which I think was the gist of the noble Lord’s question—it may be that I need to provide more information, but here we are. The new dynamic markets will be open to new suppliers joining throughout their life, ensuring that no one is locked out from the market for long stretches of time. That will be beneficial to SMEs in particular, which can decide to apply to a dynamic market at any time via a process that will be much simpler and quicker than tendering for a framework.

I believe it will be best if I set out all this information and more in a letter. With that, I hope that the noble Lord will be prepared to withdraw his amendment. Actually, these are government amendments, are they not?

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[Baroness Bennett of Manor Castle (GP)]

My Lords, I rise to speak briefly on Amendment 240 in particular, to which I would have attached my name had I noticed it in time. It is a pleasure to follow the noble Lord, Lord Clement-Jones. What he set out in terms of the problems of framework agreements are the kind of things we often encounter in the pages of Private Eye; it really is time that we saw some action on this issue.

Amendment 240

“is intended to prevent the future use of ‘VIP lanes’ for public contracts.”

I rather suspect that the nation out there, which is exhausted by politics, is probably not glued to your Lordships’ Grand Committee on the Procurement Bill this evening. I looked up the schedule: people are probably watching either “The Simpsons” or “Britain’s Parking Hell”. However, I know from what I get in my mailbag and what I see on social media that what happened during Covid with VIP lanes is a huge, continuing concern among large numbers of the British public. It was only last month that the Government were forced to admit that 50 firms had been put into the priority lane for test and trace contracts, worth billions. They included Immensa, a firm that was subsequently at the heart of more than 43,000 false negative results and had been incorporated only in May 2020. This came after the Good Law Project successfully challenged the Government’s VIP lane for personal protective equipment contracts.

So we have a situation where people are now looking at politics and saying, “We want to see things done differently”. This small, modest amendment would set a marker for achieving that; I feel that it deserves more attention both in this Room and outside it.

[Baroness Hayman of Ullock (Lab)]

My Lords, I have a few amendments in this group. The first is Amendment 235A, which was brought forward as a probing amendment so that we could consider the direct award of contracts in special circumstances. It is important that the Government both put on the record why there is a need for direct awards and explain properly the limited circumstances in which they can be used, so that things are completely clear. I also point out that, in certain scenarios, a contracting authority might be able to make a modification to an existing contract without following a competitive tendering procedure; in reality, that would have the effect of making a direct award. We need a bit of clarification around some of these issues.

The Bill introduces some changes that we would support in this area, including, for example, that the contracting authority would be obliged to publish a transparency notice in advance of making a direct award. We would very much support that. It is also interesting that Ministers will be empowered to designate specific contracts or categories of contracts that can be awarded directly in certain identified areas, such as in protecting life and for public security. It is good that we have a bit more meat on the bone in this area and on the issue around transparency.

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[Lord Fox (LD)]

My Lords, before the Minister finishes, I have two points. On the big question, I asked whether she thought that Clause 41 would prevent the VIP lane problems resurfacing or coming back. It would be good to get an answer to that, either now or later. In the Minister’s response on Amendment 239, I thought I heard her say that provisions in other parts of the Bill around operating ethically are, in spirit, reflected in Clause 41. “In spirit” is a very difficult concept to understand in law. I hope we can find a way of perhaps stiffening the spirit and making it actual. If there is a read-across, we need to find a way—either at the Dispatch Box, in some Pepper v Hart way, or within the words—to ensure that what the Minister says, which I take to be in good faith, is usable in the outside world once the Bill becomes an Act.

[Baroness Hayman of Ullock (Lab)]

Perhaps I might add that what the Minister said makes a lot of sense and is helpful, but one of the problems we have is that we do not know how effective it is going to be and whether it would work until we get into that situation again. Is there any ability to build in a review once the system has been tested, perhaps against a major public problem like we had with Covid-19?

[Baroness Neville-Rolfe (Con)]

I think our intention is to try to get rid of the VIP lanes. I will take the point away but there is a committee sitting—it will unfortunately sit for a long time, no doubt—that is looking at a lot of these important issues, and at some of these lessons. It is doing things in phases, so hopefully we will begin to get some output soon. We have had the Boardman review and, as the Committee can hear, we have tried in this Bill to learn from that and not to have a preferential system. The point about non-discrimination and such things is in the same spirit. I will take away the point about spirit and what we are doing here, but we have some good things in the Bill. I have listened to what the Committee has said but also tried to convince your Lordships about what we are trying to do.

I am advised that Clause 41 would prevent VIP lanes, as regulators will set out in advance what direct awards are permitted and Parliament would not approve anything too wide-ranging—I am sure that is true. The other point is that the Bill’s provisions on conflicts, which I am sure we will come on to debate further, also help against VIP lanes. We have quite a lot of things going on here; obviously, I am worried about piling it on. Everybody is concerned, so they all come in with different suggestions for trying to improve things. But if you pile those one on the other, you end up with rules that are too burdensome and do not work too well.

On the issue of a review, I think my noble friend Lady Noakes referred to some sort of review clause at an earlier juncture. “Review” is something that one tends to write into Bills where you have a problem. Perhaps we can discuss this further before Report to see whether a review is the right thing or whether enough is going on to try to ensure that we are in a good place on the Covid front. I respectfully request that the various amendments are withdrawn, and I would like to move the government amendments in my name.

Procurement Bill [HL]

Baroness Hayman of Ullock Excerpts

Committee stage
Monday 18th July 2022 Grand Committee

[Baroness Boycott (CB)]

I speak on behalf of my noble friend Lady Worthington, who cannot be here, to support our Amendment 452, which makes transparency provisions, in particular on issues of climate change. I welcome the Minister’s commitment at Second Reading that the Government

“want to deliver the highest possible standards of transparency in public procurement”.—[Official Report, 25/5/22; col. 856.]

While the Bill does not include a general duty of transparency compared with previous procurement rules, which required that contracting authorities act in a transparent manner, the Government have said:

“Transparency will be fundamental to the new regime. Extended transparency requirements and a single digital platform on which procurement data will be published will mean that decisions and processes can be monitored by anybody that wishes to do so.”


The Bill widens the authorities’ duties to publish notices and information on their procurement activities, and the provisions under Clauses 86 and 88 should improve transparency by making such notices available through a specified online system. This is welcome, but there is no substantive information on what exactly is going to be published. Instead, Clause 86 provides for appropriate authorities, through secondary legislation, to make regulations that will set out how notices and information will be published.

The amendment in my name and that of my noble friend Lady Worthington is intended to clarify what the regulations for the publication of notices, documents and information must contain as a minimum, by ensuring that any regulations include provisions around the availability of notices or information and that these are easily accessible.

Open and accessible procurement data will be crucial in the years ahead to enable modelling of the impacts of public contracts on carbon emissions, particularly when it comes to renewal. Spend Network has started to collect procurement data on every public tender and contract in the world and to map some of this impact on a freely available basis, but it has been hampered by a lack of good-quality inputs. Nevertheless, the data available has confirmed that a 20% reduction of emissions at each contract renewal would

“see the UK government’s contracting still emitting 686,000 tonnes of carbon per month by 2030”,

but that

“poor quality data meant that we were only able to evaluate 40% of the data”.

The recent Written Question to the Minister from my noble friend Lady Worthington highlighted the lack of easily accessible data being kept by departments on both contracts and emissions from those contracts. Will the Minister agree to this simple amendment, which would ensure that there is clarity in the legislation about transparency and accessibility, especially in relation to carbon?

While I am on my feet and we are discussing transparency in contracts, I would like to ask the Minister something that I was asked at the weekend, about the £360 million Palantir contract to manage NHS data. I was contacted by a very worried local NHS manager, who says that a list of 300 redundancies has already been drawn up in the NHS digital department and that this contract with Palantir—a second person has now left the NHS to work for Palantir—is a “done and dusted deal”. I would be incredibly happy if the Minister could give me a small reassurance that I could pass on to my friend, because obviously everyone in his department is really anxious.

[Baroness Hayman of Ullock (Lab)]

My Lords, I start by thanking the Minister for introducing all the government amendments in this group. Again, it is very helpful, as there are quite a few of them, so we appreciate that.

I will speak to my four amendments and offer my support for the others in this group, so ably introduced by noble Lords. My first three are Amendments 455, 458 and 459A, which are on digital registers and digital information. I will speak to those first. Amendment 455 would require the establishment of a digital register of all public procurement for all notices; Amendment 458 would allow the creation of a digital registration system for suppliers; and Amendment 459A would require a contracting authority to publish required procurement documents on a single digital platform. The intended purpose is to allow public spending priorities and the performance of the procurement system to be understood by stakeholders, and therefore allow authorities to plan and deliver procurement in a strategic manner.

The Green Paper Transforming Public Procurement said that a

“lack of standardisation, transparency and interoperability is preventing the UK from harnessing the opportunities that open, common and shared data could bring”,

and that

“a clear digital procurement strategy focused on transparency results in greater participation and increased value for money driven by competition.”

The Cabinet Office Declaration on Government Reform policy paper, published in June last year, also supports this when it says:

“We must do better at making our data available to all so that we can be more effectively held to account.”


It also includes an action to:

“Ensure all data is as open as possible to public and third parties.”


I am sure we would all support that.

We were therefore very pleased to see this ambition reiterated by the Minister at Second Reading when he said:

“I acknowledge that transparency has been a key ask for the House. The House expects that transparency will be improved. We believe that the Bill does this.”—[Official Report, 25/5/22; col. 926.]


We have learned from today’s debate that real transparency is incredibly important to noble Lords, as this Bill progresses. We therefore believe that it is essential to put the Green Paper ambitions into the Bill, both to deliver on this promise effectively and to make sure that it cannot be rolled back or diluted, which is one of our concerns. An unambiguous statement of this commitment would help secure adequate resources, and I am sure the Minister would agree with me on the importance of this.

Looking at Clause 88, on information relating to a procurement, in Part 8 of the Bill—there are number of subsections, so I will not read it all out—I just want to check that I am reading its implications correctly. If I understand it, it creates powers to have a single supplier portal right across government. If this is correct, it is extremely positive, but I would like clarification from the Minister that that is exactly the intention of this clause. If that is the case, it would save a huge amount of time across government and across business, allowing companies to register and update their credentials once to do business with UK government. It would also allow them to establish unique IDs for contracting authorities and, we hope, then move forward in a much more practical and efficient way, which is what we would all like to see. The purpose of my Amendment 455 is to allow the Bill and the Government to articulate this objective much more clearly. I would be grateful if the Minister can clarify this.

The other vital part of the Government’s data ambitions—to bring together all the notices and data around procurement into a single source—should also have the same elevation in the Bill. It is really important that the information can then be fed back into a variety of user-friendly ways to local authorities, major procurement companies and others, so that we can generate data-driven insights and properly track the performance of different companies. Because there is spend, there is live, ongoing and updated data, which will be extremely helpful. There seems to be the ambition behind the UK’s adoption and approval of the open contracting data standard, about which it would again be helpful to get clarification. The purpose of my three amendments on data is to gain clearer provisions in this regard in the Bill, which will be easier to understand for anyone working in the procurement industry or wanting to gain a contract.

The noble Lord, Lord Clement-Jones, also has a number of amendments on data, and I thank him for his support for one of my amendments. I know he will speak to his amendments, but I think we are in the same place on all this. I am extremely grateful for his amendments and will listen carefully to what he has to say when he introduces them.

I turn to my other amendment, Amendment 459, and thank the noble Baroness, Lady Bennett of Manor Castle, for her support for it. Its purpose is to require each ministerial department to calculate the estimated carbon emissions from public contracts entered into and to lay an annual report on this before Parliament. The amendment seeks to look at the impact of the procurement regime from an emissions perspective. Given the weather at the moment, climate change is on everyone’s mind, so I hope the Minister and the Government will think carefully about the areas where we are looking to improve the impact of the Procurement Bill—on climate change, emissions, net zero and so forth.

There is a National Audit Office report on public sector emissions, which is extremely worth looking at. I urge the Minister to have a close look at it to see whether there is any way that its recommendations can also be part of what we are trying to achieve through the Procurement Bill. The main issue is around reporting: although many companies will do it voluntarily, many others do not report at all, so there is no balance in the information that we have. For example, there are no mandatory emissions measurements or reporting requirements for the public sector as a whole. The wider public sector includes local authorities, schools and hospitals, all of which may well have high carbon emissions. Peers for the Planet published a very good report on local authorities and net zero, in which it noted that there was little consistency in local government reporting of emissions. I understand that a lot of this concerns BEIS, but the Procurement Bill provides us with an opportunity to look at whether this is something that would have a positive impact on driving down emissions.

This concludes the introduction of my amendments and I will turn now to those of other noble Lords. Many noble Lords spoke in support of the different amendments on the publication of notices and the concerns around freedom of information. My noble friend Lord Hunt of Kings Heath, in particular, made an extremely important speech about his two amendments. He said again that it is a welcome ambition to simplify what we are trying to achieve here with procurement. As I have said, any noble Lord who worked on OJEU will be very grateful for simplification. As was debated last week, it is terribly important that we do not make things more difficult for SMEs, charities, voluntary organisations and, as my noble friend Lord Mendelsohn said, for freelancers, who were often forgotten when we debated this Bill previously. Transparency is clearly very important when looking at those kinds of contracts.

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[Lord Scriven (LD)]

Well, the healthiest on the Procurement Bill and constitutional affairs Front-Bench team. I thank the Minister, I think, for passing on his cold of last week to me.

My noble friends’ Amendment 105 is also a probing amendment. Clause 19 uses the word “appropriate”, and this amendment is to see

“under what circumstances it may be considered ‘appropriate’ not to undergo an open tendering procedure.”

There are no criteria or guidelines about what may be appropriate. This is just a probing amendment to see if the Minister can explain why such a wide-ranging word as “appropriate” is in the clause. Who will decide whether it is appropriate, and what guidelines or criteria would the Government expect the authority to seek in determining whether the open tendering procedure should not go ahead?

With Amendment 96, yet again, the noble Baroness, Lady Noakes, raises some important points in Committee by changing just one word. I particularly point to what she described as the “Alice in Wonderland world”, in which you can be debarred from one part of tendering but not have been given a contract—or the other way round. The noble Baroness’s suggestion to include exclusion from the tendering process in the Bill makes eminent sense or we will be in the position in which people could, by law, tender but would be debarred from getting the contract, even if theirs was potentially the best tender around.

With those comments, I feel that, particularly on Amendment 105 in the name of my noble friends, some clear guidance from the Dispatch Box would be welcome.

[Baroness Hayman of Ullock (Lab)]

My Lords, I thank the noble Baroness, Lady Noakes, for introducing her two amendments. As ever during Committee on this Bill, she has spotted where the nonsense lies and where problems could quite easily be resolved, if her wise words are listened and adhered to.

On her Amendment 96, I know my dear and noble friend Lord Coaker is very disappointed not to be having the must/may discussion with her today and that it has fallen to me, but it is an important point. Different terminology in different parts of the Bill impacts on what is expected. What does that mean? As the noble Baroness clearly demonstrated, if you follow that logically—all the way down the rabbit hole, to carry on the metaphor—it does not make sense any more. I think she has picked up something that could be sorted out straightforwardly and I would be interested to see whether the Minister agrees.

The noble Baroness’s second amendment, Amendment 107, on the lack of assessment and what is in the Explanatory Notes not being sufficient for what we need to know to feel secure about this clause, is again a simple amendment that makes a lot of sense. To me, it strengthens and provides clarity to the Bill. The noble Baroness made the critical point that these kinds of things have a different impact on multinationals from small businesses and, as we have said previously, charities and voluntary organisations. This is important.

The noble Lord, Lord Scriven, ably introduced the amendments in the name of the noble Lord, Lord Wallace. I hope the Liberal Democrat Front Bench manages to recover before we come back in September, but I thank the noble Lord for that. They are about terminology —what the words mean and what the impact of that terminology is on the Bill. As the noble Lord pointed out, there are no guidelines and criteria, and nothing specified about what “appropriate” means, nor on whose shoulders it falls to interpret what it means and whether that could be open to challenge. Again, they are small but important amendments and we support them.

There are a number of government amendments in this group. I have read through them and they seem straightforward, but I shall be interested to hear the Minister’s introduction.

[Baroness Scott of Bybrook (Con)]

My Lords, I seek to deal with amendments related to competitive procedures. I will start with the government amendments. Amendment 98 ensures that contracting authorities can choose not to assess tenders that do not comply with the procedure. This is different from improper behaviour in a procurement resulting in exclusion, which is addressed in Clause 30. As such, this amendment gives contracting authorities the discretion to exclude for procedural breaches that do not meet the higher threshold for improper behaviour and to ignore an insignificant breach, depending on the context. Government Amendments 99 and 103 are consequential to Amendment 98.

Turning to the Clause 19 amendments, Amendment 106 would replace

“a competitive tendering procedure other than an open procedure”

with “a competitive flexible procedure”, making it much easier to understand the two types of competitive tendering procedure. There are many consequential amendments to update this terminology, including Amendments 108, 109, 115, 132, 133, 155, 156, 157, 161, 188, 189, 192, 195, 199, 202, 213, 221 and 289.