Procurement Regulations 2024

Baroness Neville-Rolfe Excerpts

Tuesday 21st May 2024 Lords Chamber

Moved by

[Baroness Neville-Rolfe]

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

Relevant document: 21st Report from the Secondary Legislation Scrutiny Committee. Considered in Grand Committee on 20 May.

Motion agreed.

Procurement Regulations 2024

Baroness Neville-Rolfe Excerpts

Monday 20th May 2024 Grand Committee

Moved by

[Baroness Neville-Rolfe]

That the Grand Committee do consider the Procurement Regulations 2024.

Relevant document: 21st Report from the Secondary Legislation Scrutiny Committee

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

My Lords, this statutory instrument represents a significant legislative step in implementing the Procurement Act 2023, which seizes the opportunity following Brexit to develop and implement a new public procurement regime for more than £300 billion-worth of public contracts. The new regime helps deliver the Prime Minister’s promise to grow the economy by creating a simpler and more transparent system that will deliver better value for money, reduce costs for business, especially small business, and improve the public sector. I thank colleagues across the Committee for the work that we did together on the Procurement Act.

These regulations bring to life and set out the practical detail necessary for the functioning of many of that Act’s provisions. Many of the measures set out the detail required by the Act to enable contracting authorities to conduct their public procurement in an open, transparent and informative manner. These include the content of various notices that will be used to communicate opportunities and details about forthcoming, in-train and completed procurements. Such contents would typically include the contact details for the contracting authority, the contract subject matter, key timings for the procurement process and other basic information about a particular procurement that interested suppliers would need to know. The provisions also cover the digital measures that authorities must follow when publishing notices, such as putting them on a central digital platform and what to do in the event that the platform is unavailable.

The transparency measures will help to open up opportunities with the public sector to a greater range of businesses, helping drive down price and increase innovation. They will provide contracting authorities with the data they need to collaborate better, drive value for money and identify cost savings in their procurements, and they will give Ministers, legislators and auditors detailed information to monitor for signs of waste and inefficiency.

Other provisions to supplement the Act include various lists in the Schedules so that procurers can identify which obligations apply in a particular case. These include a list of light-touch services that qualify for simplified rules and a list of central government authorities and works which are subject to different thresholds. The regulations disapply the Procurement Act in relation to healthcare services procurements in scope of the NHS provider selection regime introduced in January this year. These enable the procurement of NHS patient treatment services, such as NHS paramedical services or cancer treatments, to be governed by the free-standing regulatory scheme that was specifically designed for those services.

The regulations also set out how devolved Scottish contracting authorities are to be regulated by the Act if they choose to use a commercial tool established under the Act or to procure jointly with a buyer regulated by the Act. They also amend the Act to provide that reserved Northern Irish private utilities are not required to publish preliminary market engagement notices. This is because the Government do not wish to regulate the procurement of private utilities any more than is necessary. The regulations apply to reserved procurement in England, Wales, Northern Ireland and Scotland and to procurement by a transferred, that is to say devolved, contracting authority in Northern Ireland. The Welsh Government have laid similar secondary legislation which will apply in respect of devolved procurement in Wales and elsewhere if the devolved body carrying out that procurement operates mainly in Wales.

The Government have consulted fully with stakeholders throughout the reform process and we published our response to the formal public consultation on these regulations on 22 March 2024. The consultation evoked a good response from the various representative sectors and confirmed that the proposed regulations generally worked as intended. Many stakeholders urged that certain matters be clarified and explained in guidance and training, which is a key part of the implementation programme that we are rolling out across the UK. We have listened to feedback and our response confirms a number of areas where the consultation led to technical and drafting improvements.

Contracting authorities and suppliers have made it clear that they will need time once this instrument has been laid to adapt their systems and processes before we go live, so the Government have provided six months’ advance notice of the new regime before the regulations come into force on 28 October 2024. Noble Lords should also be aware that the instrument has been corrected to remove drafting references and a couple of typographical errors which crept in during the publishing processes. I beg to move.

[Lord Fox (LD)]

From the attendance, we have established that more people are interested in hedgerows than procurement. I have participated in all of what I would call the post-Brexit plumbing legislation. Although this was not the most controversial part of that legislation, it has certainly taken a long time for us to get here. The Second Reading in your Lordships’ House was just five days short of two years ago, and we have to wait another six months for these rules to be implemented, so it will take two and a half years.

Hopefully, we have improved it. As some noble Lords will remember, the Minister was at that time a Back-Bencher, before she was propelled meteorically to her current role. I thought this correction was an homage to the original Bill when it was published. It arrived very quickly, with hundreds and hundreds of government amendments, which is part of the reason why it took so long for us to get here. But we have got here. One important thing that the Minister touched on, which was stressed very early in the process, was the central importance of the central digital platform. It would be helpful if she could confirm that that platform is 100% ready to go—I think we would all hope so.

In Regulation 11, the list of the “connected person information” is huge. Although the Minister said that this makes it simple for smaller companies, it will require a great deal of effort initially. Can she confirm that this is a one-off effort that those companies have to make? Will this central digital platform be able to replicate that information—copy and paste—or will people have to enter the same information, as they do now on a variety of digital platforms, often handfuls and sometimes dozens of times? Can the Minister confirm that that is how the new system will work and that it will work that way on day one?

Contracting authorities are clearly vital and their understanding of this big set of rules will be central to the functioning of this. Can the Minister tell us in some detail how they are being brought up to speed with what is required of them to make this work? In particular, how will they bring SMEs into the picture, where they have not been before? How will the contracting authorities engage SMEs? How will SMEs know that they are now in with a shout and have an opportunity? What information will go out to our SMEs so that they can properly participate in public procurement? The Minister did a lot of work, as both a Back-Bencher and a Minister, to put these rules in place, and it is important that her work is now properly propagated out to the market.

I should remember the answer to this, because I am sure we went into it, but utilities are treated substantially differently and there are different processes here. The Explanatory Notes say that we will create a “utilities dynamic market”. I do not have the faintest idea what that is, so can the Minister please say what it is and why we should celebrate it?

At the end of her speech, the Minister talked about the position of the NHS. She would be surprised if I did not bring that up. Perhaps she tried to pre-emptively head it off at the pass. There was a lot of debate and my noble friend Lady Brinton very much led on that. We were not happy, in a sense, with the way that health services were disapplied.

Regulation 43 talks about the disapplication of “regulated health procurement”. That is not the phrase that the Minister just used, so can she again define “regulated health procurement” for the record? She listed the fact that there is a custom-made process for those services in the NHS, but we should not be too complacent, because the first test of the new NHS rules on competition and procurement found against the NHS. The rules that were being vaunted just now are not being used properly within the NHS. The first review panel set up to oversee commissioning decisions found against the commissioner and advised it to abandon its procurement of ADHD services; it was the Cumbria integrated care board that failed to do this properly.

I know that the NHS falls under a different department, but the Cabinet Office is uniquely interested in procurement right across government. There should be no complacency about the system that is now being used with the NHS. The experts on procurement exist within the Cabinet Office and I would like the Minister to say now that the Cabinet Office will engage those experts to advise health boards on how to use their own rules properly—otherwise, we will waste a ton of money on appeals and rulings against health boards. It is quite clear that they do not have the capability to apply their own rules and that they need help. They will not get that from their own people, because it is not there; the expertise for procurement is within the Cabinet Office. So I want the Minister to say that it will step in and make sure that health boards know how to apply their own rules. With that, as it has been a long time coming, let us get this going.

--- Later in debate ---

No one can accuse the Government of rushing into this, but a steady pace, shall we say, does not necessarily guarantee that businesses will know about the new regulations. Can the Minister give us some information about what is being done to explain and promote the changes? Can she let us know who, and which agencies, we should look to in order to see how this is being done so that we can judge its effectiveness?

[Baroness Neville-Rolfe (Con)]

My Lords, I am grateful to the two noble Lords who spoke in this debate. I well remember moving from poacher to gamekeeper and working across the House to try to improve what was a very important Bill, not least because of the scale of procurement that it reached. Indeed, the Act embodies our ambition to open public procurement up to a more diverse supply base, making it easier for new entrants such as small businesses—the noble Lord, Lord Fox, rightly mentioned them; indeed, all speakers mentioned them—and social enterprises. Remember that we added social enterprises during the passage of the Act, as well as measures to improve prompt payment for small businesses—those help small businesses—and the transparency of opportunities on a single platform. The Act also enables basic supplier details to be submitted only once, which picks up on the question asked by the noble Lord, Lord Fox.

In response to expert discussion in the House, I introduced additional measures during the passage of the Act. These included a new duty on contracting authorities to have regard to the particular barriers facing SMEs and to consider what can be done to overcome them, as well as 30-day payment terms on defence and utility contracts and through the supply chain. We removed unnecessary obstacles relating to audited accounts and insurance as conditions of participation—the noble Lord, Lord Mendelsohn, put down amendments on those issues, I think—which can prevent SMEs winning public contracts.

The Act introduces a new centralised debarment regime, including a public debarment list, and allows the Government to investigate supplier misconduct, including taking action to protect the public supply chain. Of course, the procurement review unit will manage the new debarment regime, including investigating suppliers, while the new national security unit for procurement will manage the investigation of national security-related debarment cases. Importantly, the PRU will also oversee compliance with the new regime and will have the power to investigate non-compliance. These reforms will shape the future of public procurement in this country for many years to come, ensuring a modern and flexible procurement regime that will deliver better outcomes for taxpayers, service users and business.

I turn to the questions posed by the noble Lord, Lord Fox. In respect of the information that suppliers have to provide for connected persons, I am happy to advise that, as long as the information remains consistent, suppliers will have to supply this information only once when they register on the online system, which they can do at any time. When bidding for a procurement, they will need merely to confirm that the information they previously provided in respect of connected persons is still current, in the spirit of One Login.

A key objective of the Act and regulations made under it is to reduce the burden on suppliers by enabling them to store core supplier information in one place; that is called the supplier information service. The core information will then be provided to contracting authorities by each supplier who wishes to participate or bid. This reduces the time taken by suppliers to bid for public procurement opportunities by ensuring that common data can be submitted efficiently and effectively, without having to duplicate core information. This is of real benefit to business, particularly SMEs.

A utilities dynamic market is a pre-approved list of suppliers from which utilities can call off. Unlike a regular dynamic market, contracts are advertised only to members of the market. The online system will be operational and ready for use when the new regime comes into force on 28 October. We are working with e-procurement system providers to ensure their readiness. New notices will be phased, with the timings set out in the commencement regulations, which will be made shortly and will set out when relevant obligations will take effect. This reflects consultation. The phasing of the notices has been designed so that notices used in the planning, tender and award phases of a procurement will all be available from the outset. There will be a natural lag until later notices are required, so those will be brought in in phases.

I also mention the work that the Cabinet Office, which obviously co-ordinates all this, will do to support the new regime. It took me through it this morning. I know that the noble Lord, Lord Fox, was interested in the detail. There are four key elements. First, there are knowledge drops, which are a range of on-demand presentations providing an overview of all the changes in the legislation.

Secondly, there are e-learning modules, which consist of 10 one-hour modules and conclude with a skilled practitioner certificate. This core training product is open to all staff from contracting authorities and named individuals who regularly undertake procurement activity on their behalf. I will take away the point that was made about health experts and see whether it is possible for them to access some of this training material, as that seemed a good point to me.

Thirdly, there will be an advanced course of deep dives—a three-day intensive course for a smaller group who have completed the e-learning modules. They are the advanced commercial practitioners who will need to become experts. Fourthly, we are supporting communities of practice, building on good online practice, where practitioners can support each other by sharing, discussing and reflecting on best practice and the challenges and opportunities within the regime.

Noble Lords will know of my passion for helping small businesses. Clearly, we will keep an eye on the training, which starts with the contractors, to make sure that we get feedback from small businesses so that we know that the regime is working well.

The concept of dynamic markets is a good one. It means that suppliers can know in advance that they will be eligible to bid. You will get several suppliers who can all bid, and it makes the system quicker and more efficient, without undermining the safeguards that we need.

The Procurement Act has improved and strengthened safeguards, with, for example, the ability in Section 42 for the Government to set out in regulation specific public contracts that can be awarded directly for a limited time for the protection that might be needed. There are new transparency notices in Section 44, as detailed in Regulation 26, and more detailed conflict of interest provisions, including the preparation of a conflict assessment under Section 83. We discussed this at great length because we had the backdrop of PPE, and I remember well how we learned from that experience. That is one of the reasons why there are lots of different transparency measures and controls in these regulations. Even if we had to move to direct awards because of some national crisis, the controls would be applied in an appropriate way. We have tried very hard to work at that.

On healthcare, where I very much understand the noble Lord’s point, I should offer to write because he raised a point about a Cumbrian example that I am not familiar with. I made it clear at the beginning that I very much understood that in some areas, the NHS will be doing its own thing, but in other areas such as the construction of hospitals, it will be subject to the broad procurement rules. I have also said that I will take a look at ensuring that the health side takes advantage of the excellent training and online briefing that the Cabinet Office team has worked so hard on.

[Lord Fox (LD)]

I thank the Minister for her point on the NHS and the health service and I look forward to receiving that letter.

There are just two things. I asked a specific question about the readiness of the central digital platform. I listened very hard indeed. I turned my hearing aid up, and I did not hear the Minister say that it is ready. In fact, I heard I heard her say that the department is working with contractors, and then she started talking about phases. That worries me, because of the centrality of this system in order for the Procurement Act to work. Can the Minister give some more detail on that? When will it be 100% ready?

[Baroness Neville-Rolfe (Con)]

I was trying to be open and honest, as I always am, by emphasising what will be clearly ready and where we are bringing other things in in phases. The first stages will obviously be ready, and that is why we are bringing the arrangements in at the end of October, which fits into our deadlines, and then there will be other material coming through. However, with luck, the system we have set up for online briefing will ensure that people know where they are, and I think it will be like other policies I have been involved in. You get a sort of bell curve. To begin with, the new and innovative people use the system; and then gradually, as more material comes on and it gets around that actually, it is really good, you will get more people coming in and more SMEs. I am very keen to work with them to make sure that the share of the cake that SMEs have in procurement, which has gone up in the past couple of years, will continue to rise, and rise very substantially.

I repeat that the online system will be operational from 28 October. The notices will be phased, and timing will be set out in commencement regulations. Obviously, the notices required from 28 October will be available and ready to use. That confirms what I have said, but it gives the extra information that there will be commencement regulations. We will make sure that noble Lords who are interested are aware of them when they are finalised.

I repeat my thanks to all involved in the work. Actually, there is a succession of Ministers whom I have to thank. There are noble Lords right across the House who have been hugely helpful by challenging us and supporting us when we are right. I also thank the officials because it has been a very, very long slog. The new procurement regime starts on 28 October, and after that they will obviously have even more to do. Thank you very much. Please join me in supporting the regulations.

Motion agreed.

Economic Activity of Public Bodies (Overseas Matters) Bill

Baroness Neville-Rolfe Excerpts

Committee stage
Tuesday 14th May 2024 Lords Chamber

[Baroness Janke (LD)]

My Lords, to answer some of the points made by the noble Baroness, Lady Noakes, the idea that individuals are not targeted is certainly not sufficiently reassuring to make local decision-makers feel protected. Most of what is in the Bill seems to be very much targeted at local authorities and their members.

It is perhaps worth while to point out here, in this unelected Chamber, that councils are directly elected and are accountable to their electorate. They are also obliged to report back to their constituents about such things as decisions that they have made. I was a former leader of a council, and I would have wondered, on seeing this Bill, having been asked why I had made a certain decision, whether replying in a certain way would mean that I was prosecuted, or perhaps that I was not able to reply because I am forbidden to speak about this. There is sufficient lack of clarity in the Bill to make people wonder about that. I do not think that it has been demonstrated otherwise. As the noble Lord, Lord Warner, said, the Constitution Committee sees this as a major threat to free speech. We need some more guidance on this.

I take exception to the idea that, somehow, statements from student encampments are equated with statements issued by locally elected authorities and their officials. They are not the same at all. Local authorities have a constitutional role, and they should be respected as such. The contempt that I have heard from some people in this Committee is unwarranted, given the lack of evidence of councils making such decisions as are prohibited in the Bill.

The idea that prohibiting such statements will have a good effect on social cohesion is much more likely to have the opposite effect. If people are told that they are not allowed to make statements, they are much more likely to try to find other ways of getting their messages across. The idea of oppression leading to better social cohesion seems to me to be a false premise.

I agree with the noble Baroness, Lady Chapman, that there is a complete failure by many of us in this Chamber to explain why Clause 4 is necessary. We have not really heard any good reason, other than the noble Baroness, Lady Noakes, telling us it is for social cohesion.

On the idea that freedom of speech is offended by Clause 4, as the right reverend Prelate said, freedom of speech is a basic right and a cornerstone of democracy. Although we are an unelected House, we fight for democracy—I would hope—and stand by democratic principles, as has the Constitution Committee, as told to us by the noble Lords, Lord Beith and Lord Warner.

The practical issues with the Bill, as to how its provisions are actually enforced, is again something that needs clarity. As the noble Lord, Lord Warner, said at the beginning, we are discovering with the Bill that, the further we go with it, it really lacks clarity. Trying to establish what it is meant to do and how it is meant to do it seems to have defeated us so far.

We need much better clarification about the Human Rights Act. If the Constitution Committee of this House tells us that the Bill contravenes Article 10 of the Human Rights Act, we need to know how it is that Ministers are telling us that it is somehow compliant, as this is clearly not the case.

As the noble Lord, Lord Beith, said, to prevent people talking about issues important enough for them to be calling for a boycott is an outrage. The Explanatory Notes trying to maintain that somehow individual councillors will not be targeted or held responsible is totally inadequate if that is not going to be on the face of the Bill.

The clause deserves to be removed. I very much regret that it disrespects the role and responsibility of directly elected councillors and their officials. It has extreme overreach in trying to gag them and prevent them explaining their decisions, for which they are publicly accountable. I believe that contraventions of the ECHR are matters to be taken very seriously, so I want to hear from the Minister further explanation and further response to the recommendations of the Constitution Committee.

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

My Lords, Amendment 33 to remove Clause 4(1)(b), moved by the noble Baroness, Lady Chapman, and the amendment in the name of the noble Lord, Lord Collins, to remove Clause 4, undermine the aims of the Bill.

Before I address the amendments, I reiterate that the Government are committed to protecting freedom of speech, which is why the Bill’s provisions apply only to public authorities and not to individuals or companies in their private capacities. I made that clear in my response to the Constitution Committee report in March and set out why the clause is necessary to fulfil the 2019 manifesto commitment.

I also clarify to the noble Baroness that we are not creating any new criminal offences in the Bill for statements about boycotts or handbags or any other kinds of statements. Moreover, statements about one wanting to steal someone’s handbag would clearly not have an impact on community cohesion in the way that statements of intent to boycott may. Statements of intent to boycott can be threatening and intimidating, particularly for those within the Jewish community.

[Baroness Chapman of Darlington (Lab)]

My Lords, we are not talking about a statement of intent to boycott; we are talking about a statement that you would have done something but you do not intend to do it. That is the point that we are trying to make.

[Baroness Neville-Rolfe (Con)]

I think that it is necessary to make these points within the framework of the Bill.

I will move on and explain Clause 4, which, in its entirety, is an instrumental part of the Bill. It prohibits public bodies from publishing statements indicating that they intend to engage in activity prohibited by the Bill. That includes statements indicating that the public body would have acted differently if the legislation had not been in place.

I will deal directly with some points that I feel are misconceptions. The clause will not affect the statements of individuals, unless they are speaking as or on behalf of a public authority. The noble Baroness, Lady Chapman, is not speaking for a public authority in her colourful example; I assure her that she would not be in breach of the ban if she were making a statement of intent to boycott. Even when an individual is speaking on behalf of a public authority, the ban applies only to the public authority itself and there is no personal liability for the individual. Thos includes councillors, to answer the question raised by the noble Lord, Lord Davies of Brixton. For that reason, I reiterate—

[Lord Warner (CB)]

I am very sorry, but I must ask the Minister to address the question about Clause 1(7)(b). If she reads that clause, she will see that it could cover any individual who seeks to influence a decision-maker. That could include, in my interpretation, a journalist writing a campaign statement in a newspaper, asking whichever council it is to take action.

[Baroness Neville-Rolfe (Con)]

I will come on to decision-makers.

I reiterate that it is important that the Bill does not breach Article 10 of the ECHR on the right to freedom of speech, and I have already reiterated the Government’s support for free speech. The reason the Bill is compatible with the ECHR is that public authorities do not enjoy human rights, as the purpose of the convention is to protect individuals from undue interference by the state, of which public authorities form a part.

I gave a full reply to the committee in my letter of 15 March, and we have already added extra provisions to the Explanatory Notes, some quoted by the noble Lord, Lord Beith, to make it clear how the sorts of concerns expressed this evening may be mistaken. He provided an example where a local authority debated a motion to boycott that was ultimately not passed, and asked whether the public authority would be in breach of the ban if it explained that the reason it did not support the motion is that it would be illegal under the Bill. In this scenario, it is the individual councillors who said that this is the reason they did not support the motion in the vote. The public authority has not adopted the motion. Its statement merely summarises the individual councillors’ reasoning. It is therefore not an expression of the public authority’s intention to boycott. Even in the case where the councillor was speaking on behalf of that public authority, such a statement would be in breach of the Bill only if it clearly indicated that the public authority intended to engage in a boycott in the exercise of its public functions or would engage in such a boycott if that were lawful.

[Lord Beith (LD)]

As I say, it is the leader of the council who is being questioned as to why the council did not, in the event, agree to a boycott, although there were speeches in the chamber and maybe some votes cast supporting a boycott. What is he able to say that does not fall foul of the legislation as currently drafted? If he says, “The reason we are not going ahead with this is that it is against the law, and this council does not do things that are against the law”, is that not in breach?

[Baroness Neville-Rolfe (Con)]

The principle is that the person seeking to influence would not be caught by the Bill. The provision is to deal with a situation in which a public authority boycotts because of pressure from someone else, rather than its own disapproval of a foreign state.

[Lord Beith (LD)]

I apologise, but I think the Minister is trying to answer at the same time the points that I and the noble Lord, Lord Warner, made. His point was about the category of people referred to in Clause 1(7), I think. I am talking about a situation, directly following the example that I gave and she has used, in which the leader of the council seeks to explain why the council is not doing what at least some people were recorded as having said that it should do during the debate, saying, “No, we’re not going to do that because this council does not do things that are against the law”.

[Baroness Neville-Rolfe (Con)]

I will take the noble Lord’s example away. I have given him a clear statement and he makes a reasonable point. I think there is an answer to it, but I will not just make it up; I want to give him a clear answer on that. Perhaps I can move on and deal with one or two other concerns.

[The Lord Bishop of Manchester]

I am sorry to delay things yet further. We have had a lot of discussion about theoretical examples of what might happen. I tried to give your Lordships’ Committee a particular example of a case against the then Mayor of London. It was a notorious case and it took months in the courts to decide whether he was acting as a public authority or in his private capacity. Therefore, how can the Minister seem to think it so simple to decide when somebody is acting in a private capacity and when they are acting as a public authority, given that the one case that really got the public attention spent months in the courts before it was eventually determined that on that occasion he had been acting in a private capacity? I am sure that everybody can remember the case.

[Baroness Neville-Rolfe (Con)]

I am afraid that I am not familiar with that case, but I take the right reverend Prelate’s point. The way I have described this shows that in fact this is limited in intent; free speech is possible in a personal capacity. I will come on to say a little more about that and about decision-makers, because I know that we need to clear up those points and I am conscious of time.

The noble Baroness, Lady Chapman, highlighted that Ministers in the Scottish Government would be captured by this provision. As I have explained, as Ministers in the Scottish Government are public authorities for the purpose of human rights, they do not have ECHR protections in their public functions. It is clearly right that this provision should apply to Scottish Ministers to ensure that communities in Scotland are protected from these divisive statements, and foreign policy is a reserved matter. Additionally, Clause 1 applies only in relation to procurement and investment decisions in the exercise of public functions. Therefore, Clause 4 would not apply to statements made by Scottish Ministers about how they tend to act in their private lives.

[Baroness Chapman of Darlington (Lab)]

Can we be absolutely crystal clear on this? The Government are arguing that a Minister in Scotland, the Mayor of Greater Manchester, Andy Burnham, or the First Ministers of Wales or Northern Ireland could not legally make a statement saying, on behalf of the public authorities they are elected to lead, that they do not intend to break the law because they do not break the law. Clause 4 would prevent them doing that.

[Baroness Neville-Rolfe (Con)]

I am not sure that is right. I will seek advice.

[Baroness Chapman of Darlington (Lab)]

It is important.

[Baroness Neville-Rolfe (Con)]

It may be important, and therefore it is all the more important that the noble Baroness’s question is answered fully and accurately. I have made it clear in answer to the noble Lord, Lord Beith, that as only public authorities are subject to Clause 1, Clause 4 is strictly limited to the actions of public authorities and therefore not individuals associated with public authorities.

[Baroness Drake (Lab)]

As chair of the Constitution Committee, I should say that the answer from the Government went on to say that declarations could be as harmful as the boycotts themselves, and that was deployed in defence. It is quite right to clarify the point made by the noble Lord, Lord Beith, on what constitutes a declaration that does or does not fall under the qualification in paragraph 6 of the Minister’s reply to the Constitution Committee. I do not seek to express a view; I am just saying that there is that undefined element.

[Baroness Neville-Rolfe (Con)]

I note the point that the noble Baroness has made. We did reply to the Constitution Committee, but I will reflect further on this point.

My noble friend Lady Noakes said that there had been some confusion due to the use of the term “person”, which I have already referred to. To respond to the point raised by the noble Lord, Lord Hendy, in the context of this clause, the legal term “person” refers only to a person subject to this Bill’s ban. In other words, it refers only to a public authority as defined in Section 6 of the Human Rights Act 1998. The legal term “person” does not have the same meaning as in normal English. This is standard legal drafting.

Additionally, for the purposes of this Bill, decision-makers are public authorities—as explained by my noble friend Lady Noakes and confirmed in Clause 2(1) of the Bill, which I have just referred to. Public authorities will delegate decision-making to individuals, but individuals’ decisions or statements are captured only when they are made on behalf of the public authority. This issue was also discussed in Committee in the other place. It was because we listened to the concerns raised on this point that we revised paragraphs 32 and 33 of the Explanatory Notes. Paragraph 32 states:

“As only public authorities are subject to clause 1, this clause is strictly limited to the actions of public authorities”


and therefore not individuals associated with public authorities. I think that goes three-quarters of the way to answering the question asked by the noble Baroness, Lady Chapman, but I will follow up.

I hope that makes it clear that this Bill is not an assault or restriction on the principle of free speech. Rather, it aims to ensure that the UK speaks with one voice internationally. Public authorities should not be pursuing their own foreign policy agenda or publishing statements on foreign policy. It distracts from their core duties. Clause 4 will support those bodies to remain focused on that purpose. It is a core part of the Bill and meets the manifesto commitment to ban public bodies from imposing their own direct or indirect boycott, divestment or sanctions campaigns against countries and territories.

Briefly to address Amendment 33, and the point raised by the noble Baroness, Lady Chapman, I remind the Committee of just how divisive of community cohesion within the United Kingdom declarations of intent to boycott can be. That includes statements made by public authorities that indicate that they would intend to participate in boycotts and divestments if it were legal to do so. The right reverend Prelate the Bishop of Manchester, who I am very glad has joined our discussions, will have noted what I said about elected officials, including councillors, expressing a view which is not related to the narrow purpose of this Bill. He asked for an example of our concern. We saw a good example in Leicester, which my noble friend Lady Noakes referred to. In its resolution in 2014, Leicester City Council passed a motion targeting the activity of the Israeli state with a boycott

“insofar as legal considerations allow”.

The motion was widely condemned by Jewish groups and was extremely divisive. This demonstrates the need to ban statements of intent to boycott or divest which express—

[Lord Wallace of Saltaire (LD)]

My Lords, we need to be very careful about how we talk about social cohesion at present. As it happens, I spent some time last weekend in Saltaire, which is part of the Bradford local authority, talking with one of Yorkshire’s Christian leaders and one of Yorkshire’s Muslim leaders about how we maintain social cohesion and interfaith co-operation under the current circumstances. It is not easy. These are two people whom I like and trust, and they are very good friends. We have to recognise the impact of the ongoing war, and in particular the response of our younger generation—white and Christian, and south Asian and Muslim—in all their diversity. It is very delicate at present, and simply asserting that stopping debate is a way to maintain social cohesion is not the answer.

[Baroness Neville-Rolfe (Con)]

As the noble Lord knows, the Bill aims to improve the situation with social cohesion. I note what he said, but we have seen examples of councils, such as Islington, passing motions in opposition to the Bill alongside foreign policy statements about Israel and other countries. While this might not be a breach of the ban, it demonstrates a strong interest in public authorities engaging in BDS campaigns. It could demonstrate that the Bill is already be having its intended effect of preventing public authorities making divisive statements.

The point is that, overall, Clause 4 supports the main aims of the Bill in ensuring that the UK speaks with one voice internationally and has one foreign policy agenda, and that public bodies do not introduce policies in that area that risk dividing communities at this difficult time. Accordingly, for this evening, I kindly ask the noble Baroness to withdraw her amendment.

[Baroness Chapman of Darlington (Lab)]

My Lords, this has been a helpful debate, if somewhat frustrating at times. I do not think that it is good enough to be reminded of social cohesion as a way of trying to entice us into supporting this measure. We all want to work hard to improve social cohesion where there are issues, and I know that the Minister would accept that that is our intention too.

There are fundamental problems with this clause. The Minister herself has said that she is unable to answer some quite basic questions that we have asked, and not for the first time this evening—we have asked these questions before. We have used different examples to try to tease out the answers, but the principal question is the same: who will be subject to this measure and what might the effect of that be? We still do not know the answer to that.

[Baroness Neville-Rolfe (Con)]

With respect to the noble Baroness, I have answered the large majority of the questions, but I said that I would take away the underlying question that she is enunciating.

Economic Activity of Public Bodies (Overseas Matters) Bill

Baroness Neville-Rolfe Excerpts

Committee stage
Tuesday 14th May 2024 Lords Chamber

I conclude by making a final plea to the noble Baroness: sit down with us and try to work out how we can address the manifesto commitment, without widening its scope and creating the legal uncertainty that inevitably leads to court cases. We do not know the outcome of those.

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

My Lords, I thank noble Lords for their thoughtful contributions today and for their engagement. I particularly thank the noble Baronesses, Lady Drake, Lady Janke and Lady Blackstone, and the noble Lords, Lord Shipley, Lord Willetts and Lord Hannay, who met me and officials to discuss the amendments a couple of weeks ago. During that meeting, noble Lords expressed their concerns regarding the financial and practical matters exception and the application of the Bill to the administering authorities of local government pension schemes. I sympathise with their ask for clarity in this area and I have taken some time to reflect on their comments. I will set out why, on balance, I think the Government’s drafting is sound on these points.

Before I address the amendments, I will set out why it is so important that the administering authorities of LGPSs are captured by the Bill. It is not a manufactured problem, as suggested by the noble Lord, Lord Wallace. Administering authorities come under frequent pressure from external pressure groups such as the Palestine Solidarity Campaign and the BDS movement to engage in BDS campaigns. We saw a notable example in 2021, when a UN special rapporteur wrote to the administering authorities of LGPSs demanding divestment from a number of Israeli companies. My noble friend Lady Noakes referred to this. The demands cited the LGPSs’ ability to play a transformational role.

We have also seen the BDS campaigners take credit for some decisions by administering authorities of LGPSs to divest from Israeli companies. For example, campaigners took credit for a decision by East Sussex Pension Fund to divest from an Israeli company.

Amendment 27, tabled by the noble Baroness, Lady Drake, would ensure that the ban does not hinder the ability of public authorities to consider financial risk and impact in their investments in a way that is influenced by moral or political disapproval of foreign state conduct. The Government agree with the policy intention of the noble Baroness’s amendment, and I acknowledge her expertise in this area.

However, having looked into the matter, we remain of the view that the Bill as drafted does not prevent public authorities being able to assess the financial and political risk of investments. The exception for considerations reasonably relevant to financial value and practical utility ensures that public authorities, including the administering authorities of LGPSs, will be able to make commercially viable decisions. This includes decisions to exclude investments if an assessment of the political and economic risks of an investment’s location could reasonably have an impact on the financial return of the investment.

I am grateful for the contributions of my noble friends Lady Altmann and Lady Noakes, and I confirm to the noble Baroness, Lady Drake, that

“financial value or practical utility”

captures considerations relevant to an investment’s long-term value and financial risk, not just its current value. I hope that my clarifying this on the Floor of the House provides the noble Baroness with reassurance.

[Lord Warner (CB)]

I want to clarify something that the Minister just said. Does this mean that, if my local authority pension scheme, from which I benefit, decided that an investment in Israel was risky and put the members’ money at risk, it could disinvest because it was risky, but not for any other moral grounds? Is that still permitted under this legislation?

--- Later in debate ---

[Baroness Neville-Rolfe (Con)]

I will cover that later in my response. There is a point about territoriality, which we will come on to address.

Additionally, the drafting of the guidance referenced in the speech from the noble Baroness, Lady Drake, does not change our view of the scope of this exception. I agree with my noble friend Lady Noakes’ assessment that the amendment could cause some confusion. If we were to accept it, it might raise questions about what considerations relevant to “financial value” and “practical utility” actually capture if they do not capture risk assessment.

I know that the noble Baroness will be disappointed that the Government are unable to accept her amendment, but we did not brush it aside and looked carefully at what she said at our helpful meeting. However, I hope that she is reassured by the Government’s position that the Bill’s current drafting adequately addresses her concerns, with that clarification.

Before I turn to other amendments, I will address the noble Baroness’s point about the impact of judicial review on LGPSs. I will provide a fuller response to the detail in the later group that was referred to in the debate. The Government believe that it is right that companies that have been the target of boycotts and divestment campaigns can challenge these decisions through the courts. There are safeguards in place to prevent undue or nuisance claims. None the less, the number of examples of administering authorities participating in BDS campaigns is relatively small; therefore, we do not anticipate a large burden on the courts.

Amendment 45, tabled by the noble Baroness, Lady Blackstone, would remove management decisions from the Bill’s definition of “fund investment decision”, with a view to ensuring that the ban does not apply to the stewardship activities of administering authorities of LGPSs. I confirm, as we agreed at our meeting, that stewardship activity would be an example of a management decision.

It is right that the ban applies to stewardship. Otherwise, administering authorities could, as part of the stewardship of their investments, ask companies in which they have invested to engage in boycotts and divestment campaigns. If this was allowed, campaigners would be emboldened to lobby local government pension funds to ask companies in which they invest to boycott and divest. These campaigns distract local administering authorities from their core duties and could contribute to community tensions. We believe that allowing this kind of activity would undermine the ban.

The Bill contains an exception to the ban for considerations that a decision-maker considers relevant to the financial value or practical utility of an investment. Therefore, it would not prevent public authorities asking companies in which they invest to consider matters that they consider may affect the long-term value of their investments.

I understand that the noble Baronesses, Lady Blackstone and Lady Janke, are concerned that this position conflicts with the Government’s wider policy on stewardship. We do not consider this to be the case. This is an extremely narrow Bill that will place restrictions only on the ability of the LGPSs’ administering authorities to make territorial considerations in their investment decisions that are influenced by moral or political disapproval of foreign state conduct. LGPSs’ administering authorities will still be able, through effective stewardship, to exert a positive influence on investee companies to promote strong governance, manage risk, increase accountability and drive improvements in the management of environmental, social and corporate governance issues.

Administering authorities are ultimately responsible for setting the investment strategy of their funds, having taken proper advice. This includes setting their asset allocations to achieve a diversified portfolio of investments which overall is suitable to meet liabilities, as well as setting their approach to responsible investment, in line with statutory guidance. The Bill will support administering authorities to remain focused on their core duties, protecting the long-term financial interests of beneficiaries.

Amendment 46A, tabled by the noble Lord, Lord Collins, would provide that a pension fund in scope of the ban can make territorial considerations influenced by moral or political disapproval of foreign state conduct when making decisions in line with certain investment guidelines published by the UN. The Bill will apply only to campaigns that target countries and territories specifically, and therefore will not prevent the adoption of ESG requirements that are not specific to a country, such as modern slavery requirements. For example, to address the point made by the noble Baroness, Lady Janke, the Bill will in no way prevent the LGPS administering authorities divesting from fossil fuels, as long as this policy is applied to all countries and territories consistently. Similarly, the Bill will not prevent the administering authorities divesting from companies implicated in human rights abuses, provided the policy is applied to all countries, rather than identifying particular countries or territories.

The Bill will not prevent LGPS administering authorities making a decision in line with guidelines published by the UN, as long as this does not entail the public authority having regard to a territorial consideration in a way that indicates moral or political disapproval of foreign state conduct. For example, the Bill will not prevent public authorities having a policy to comply with all UN sanctions or UN Security Council resolutions, as that is not a territorial consideration. However, the policy must be genuinely non-country specific—

[Lord Collins of Highbury (Lab)]

Can the Minister specifically address the contribution from the noble Lord, Lord Hannay, in relation to territorial extent? I have in mind, because it was raised in other groups and discussions, companies that attempted to have factories or investments in the Occupied Territories and might then have withdrawn from those investments. I want her to focus on that. If a company decides that it will open a plant in the Occupied Territories and will not have the benefit of legal protection under international law, and it would be contrary to the advice the Government have given, and if a local government pension scheme then said, “Well, that company is putting our investment at risk and therefore we will disinvest”, would that be legal under the Bill?

--- Later in debate ---

[Baroness Neville-Rolfe (Con)]

I can confirm that LGPSs will be allowed to divest from, say, the settlements or Israel if the sole reason is that the investment is financially risky. It is if it is caught by the flavour of the Bill that we run into a problem—

[Lord Collins of Highbury (Lab)]

It is important for clarification because the Government’s own advice says “It’s risky because it’s not legal and therefore won’t have that international law protection”. So it is very good if the Minister is being absolutely clear in relation to the Occupied Territories.

[Baroness Neville-Rolfe (Con)]

Perhaps I could just finish on the other points. It makes perfect sense to ensure that, when having regard to ESG requirements, these are applied consistently by LGPS administering authorities and do not single out particular countries or territories—because it is the latter that will breach the ban, as I think we all now understand.

The Bill allows for a number of exceptions, including considerations relating to labour market misconduct, modern slavery and human trafficking. Therefore, the Bill will in no way prevent the administering authorities adhering to modern slavery guidance.

Finally, I turn to the proposition from the noble Lord, Lord Davies of Brixton, that Clause 12 should not stand part of the Bill—

[Lord Hannay of Chiswick (CB)]

I am slightly puzzled by the Minister’s statement that the Government wish to avoid any territorial connection, since the Government themselves have placed large chunks of territorial description in the Bill. Could the Minister enlighten us on that? After all, it is the Government who have put down a Bill that talks about Israel and elides Israel with the Occupied Territories, the Golan Heights, east Jerusalem and the West Bank. Although they have confirmed their view that the settlements in all those areas are illegal, and therefore that investment in those settlements would be illegal too, it is the Government who are specifying this matter territorially. By all means, take the whole lot out—that would be fine.

[Baroness Neville-Rolfe (Con)]

As I was trying to explain, the important point is that it depends on the motivation for the decision. The Bill would prohibit only investment and procurement decisions that would appear to a reasonable observer to be influenced by moral or political disapproval of foreign state conduct, and have a territorial element. It would not prevent public authorities making any other kind of territorial or practical business considerations. I have been trying to clarify this.

As I am conscious of time, perhaps we could turn finally to—

[Lord Warner (CB)]

I am sorry, we are getting very confused, certainly at this end of the House, as to what is the issue of risk. If a country—let us forget the names of the countries in the Bill—has a reputation for unrest and uncertainty, the cautious trustees of a local government pension scheme are highly unlikely to want to put their members’ money at risk. Where we have a situation in, say, a number of Middle Eastern countries where that is the position, they would, quite reasonably, in pursuit of their fiduciary responsibilities, not invest in those countries. So they would presumably be documenting that the reason they were not investing in those countries was the risk at which it would put their members’ money. Is that the position? As long as they show that that the reason they have made investment decisions to disinvest from, let us say, Israel or the Occupied Territories, is because it puts at risk their members’ money, is that okay under this legislation?

[Baroness Neville-Rolfe (Con)]

To confirm, I think that is what I said a couple of minutes ago. The sole reason must be that it is financially risky—that it is business risk guidance, not boycotts. My own feeling is that that is a helpful clarification. I am sure that noble Lords will look in Hansard at what I have already said.

If I might now finish, I would very much like to—

[Lord Thomas of Cwmgiedd (CB)]

Before the Minister sits down, which she has indicated she is very anxious to do, I would like to go back to the, in my view, very unfortunate discussion that we have had about the definition suggested in Amendment 27.

As I understand it, it is accepted that financial risk is included within the wording. What is unclear—no doubt in years to come people will pore over the Minister’s speech, so I want another little bit for them to pore over—is: what about financial impact? I think the Minister said that that gave rise to uncertainty, but it would be helpful to know whether, in looking at the way in which decisions can be made, the financial impact can be taken into account. It would be so much better, of course, if we put the words in the Bill and left it not to accountants but to lawyers to deal with in the future.

[Baroness Neville-Rolfe (Con)]

I can reassure the noble and learned Lord that lawyers have been involved in drafting the Bill, as he can probably imagine. I tried to set out quite clearly at the beginning why we felt that the wording we got was right; that included financial impact. I have subsequently clarified the point about motivation and financial risk.

In the excitement, I have lost my place. I was asked about the effect of removing Clause 12, and was hoping to be able to answer the noble Lord. Removing the clause would mean that the ban would not apply to the fund investment decisions of administering authorities of LGPS. The administering authorities are local authorities, which are clearly a core part of the state and are therefore public authorities for the purposes of Section 6 of the Human Rights Act. That is why they are the only pension funds captured by the Bill. We have seen clear examples of local authorities attempting to engage in BDS activity in the past. It would not be appropriate to apply the ban to funds administered by private entities, such as the Universities Superannuation Scheme.

As I have argued before, council tax payers should be able to expect their local councils to exert time and effort on solving local issues, rather than spending time thinking about boycotts of foreign states when, as the noble Lord has said, the beneficiaries expect the responsible authorities to concentrate on returns and the ongoing viability of their investments in the interests of the beneficiaries. If the Bill were to stand without Clause 12, councils coming under pressure to develop their own policies on divisive international issues would be pushed towards an LGPS loophole to implement BDS campaigns.

The priority for these funds should be to provide stability and good long-term returns for the hard-working local government officials who are their members. We now know that this includes the noble Lord, Lord Warner, the noble Baroness, Lady Janke, and others. The Bill helps the administering authorities not to be distracted from this important purpose, and to focus on returns in a responsible, long-term way. For these reasons, I ask noble Lords not to press their amendments and not to oppose the question that Clause 12 stand part of the Bill.

[Baroness Drake (Lab)]

My Lords, I thank everyone for participating in this debate, particularly those who supported my amendment.

I should make it clear that I have not actually challenged the manifesto commitment; lots of others do, but I have not. I have challenged that the manner of its implementation introduces legal uncertainty and perverse consequences: inviting a wider range of legal challenges and judicial review. It would seem good business to address that.

The Minister says that she hopes I am assured by the Government’s assurances, but it is not me who needs the Government’s assurances; I am not a decision-maker in the Local Government Pension Scheme or in public procurement. Most people know that I am a trustee, but I am not in a local government pension scheme. It is those with the concerns—I know they have them—and the decision-making responsibility who are not reassured by these statements, and were not reassured by the statement of the Secretary of State.

We can stand on these Benches and argue between ourselves as to what “financial” does or does not embrace —I can bore you with 30 years of experience and what legal guidance I have had as a trustee—but that does not matter. We have an uncertainty; we are resting on a government statement that it is not uncertain, but we are already uncertain as to whether it includes impact. We could simply address the issue and put “financial risk” as one of the explicit considerations that need not necessarily fall foul of the Bill. I have not heard a single good reason today why such a simple tweak could not address this issue. I have had wider discussions on a whole range of things. It is not only me but people I have spoken to—who will be engaged in decision-making—who believe it opens up the range for judicial review and legal challenge, and feel it has legal uncertainty. It seems to be good sense, when you are looking at a fund of £360 billion, that when those concerns are expressed, you address them.

The Bill creates a whole new machinery that allows the checking of the integrity of local government pension scheme investment decisions against a new set of criteria. That has opened up new grounds for judicial review and given opportunities or succour to possibly bad-faith actors. Legal proceedings could demand to know all the details of exchanges and engagement in discharging stewardship duties, to see whether an investment decision fell within an accepted category. In a £360 billion local government pension scheme, I would want to nail that. If I was a government department and was going to introduce that machinery—which suddenly introduces a whole new set of criteria for investment decisions—I would want to nail down the range of areas under which local government pension scheme decision-makers could be attacked.

There is uncertainty. I quote from the Financial Markets Law Committee report, which the Government have endorsed and think is a good idea. It says that

“investment decisions have all become more challenging in the context of sustainability and the subject of climate change … Today it is sometimes easier to state the duties than it is to apply them”.

Well, the Bill makes it even more difficult to apply them. It brings a whole new range of criteria and invites legal uncertainty at the same time, because we cannot agree on the definition of “financial value”, but if we added a tweak, such as risk and impact, we could nail some of this. As has been said, why can we not just lock it down and get rid of some of this uncertainty?

We have some guidance on impact. I cannot bring every reference document that I would bring to the table if I was sitting in a negotiating room, but we have very new guidance from the DWP, on its website, on social factors and the impact. These are not the only factors, but it gives a meaning to “impact”:

“the impact of social factors on an investment”

or the “impacts of an investment”. It is a pretty wide range. In fact, on ESG, the statutory guidance to local government says that it can consider any factor that is financially material to investment principles. So we can track from the Government’s own publication what impact means. The Minister referred to having government lawyers; they will have drafted some of those documents.

The explanatory statement to Amendment 46A says that its intention is for there to be the ability to carry on applying ESG factors in the way they have traditionally been applied. We know what that means in local government, because it is set out very clearly in statutory guidance.

On the issue of territorial matters, I tried to give an extreme example—passive funds. Anybody who is a trustee knows what passive funds are. On the logic of this, unless we put “risk” in very clearly, if you have a passive fund that does climate transaction benchmarks, you might be liable to someone saying, “Well, there was a company or a country in there that was screened out; did you individually interrogate the way in which that passive fund that you invested in was screened out?”. I know that is extreme, but this is the situation we get into unless issues such as impact and risk—clearly legitimate factors to take into account, as set out in statutory guidance from the relevant department to LGPS—can unequivocally be taken into account.

The noble Baroness, Lady Altmann, spent a lot of time referring to the Local Government Pension Scheme as a statutory pension scheme; it is not a trust-based scheme. Absolutely—I mentioned that because I wanted to set out that I understood that distinction because it is not relevant to the point I am making. It is not relevant to the point that it is ambiguous and uncertain under the terms of this legislation.

Permanent Secretaries: Appointment and Removal (Constitution Committee Report)

Baroness Neville-Rolfe Excerpts

Thursday 9th May 2024 Grand Committee

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

My Lords, this is essentially a debate about Permanent Secretaries, and especially their appointments and what happens when they leave office. I am well acquainted with the species, having been married to a former Permanent Secretary for over 40 years. Noble Lords might agree that our four sons are evidence of a close and indeed intimate knowledge of the subject.

The Government are grateful to the Constitution Committee for its report. I thank the noble Baroness, Lady Drake, for her clear summary and her questions, which I will try to answer in context. I thank the noble Baroness, Lady Stuart of Edgbaston, for her tireless work on the commission, relating to some of the most important roles in the country, as she said.

We are dealing today with one of the most delicate parts of the UK constitution. In this country, we have a system, supported by the report, that the Civil Service should be impartial and able to serve any Administration. They do it differently in the US and in France, for example, but our system has been successful, by and large, for 150 years. Impartiality is one important factor. Another is that the relationship between Ministers and civil servants, especially very senior ones, is crucial to government performance, and there is always a personal element too. Good relations are very important, as the noble Baroness, Lady Chapman, said, as is the ability of civil servants to speak truth to power.

The conventions have to be able to function satisfactorily, not just day to day but when there is a major challenge such as Covid-19. They also have to be able to operate well in the presence of powerful and unusual personalities. I have witnessed this in several departments, as a member of the SCS, as a Minister and from the perspective of private industry.

By and large, I agree with the committee and the noble Baroness, Lady Drake, that the system is worth preserving. In particular, I agree that the impartiality and perceived impartiality of the Civil Service is a central tenet of our constitution, which, as the noble Lord, Lord Butler, observed, is an important principle in the appointment of civil servants. As he said, from a constitutional perspective, the arrangements provide a good balance.

Ministerial involvement in the appointment process for Permanent Secretaries has to strike a balance. It allows input into the job description, the person specification and the composition of the panel, while preserving the important principle of appointment on merit. The report said that some Ministers were not aware of this. The Deputy Prime Minister and the First Civil Service Commissioner, as we have heard from her, wrote to government Ministers on 8 April to set this out and encourage them to take up opportunities to engage in the process.

The noble Baroness, Lady Chapman, asked about special advisers. They have no role in the appointment of civil servants. The Constitutional Reform and Governance Act 2010 states clearly that special advisers

“may not … exercise any power in relation to the management of any part of the civil service”.

It refers to the Code of Conduct for Special Advisers. It in turn specifically states that this includes the recruitment of civil servants, and this is reiterated in the Recruitment Principles.

The close working relationship between the Cabinet Secretary and the Prime Minister necessitates the Prime Minister’s close involvement with the appointment of a new Cabinet Secretary. The Civil Service Commission’s recruitment principles do not need to include specific provisions for this appointment. Any process should remain sufficiently flexible to enable the Prime Minister of the day to refine the selection approach as they wish, with the benefit of Civil Service advice. In practice, as has happened in most cases, candidates have submitted an application and have been interviewed for the role.

I also agree with the committee that external appointments to the Civil Service can fill skills gaps and refresh organisational culture. Moves in and out of the Civil Service may benefit the career development of individuals and bring new insights and recipes for success into government. I very much welcome my noble friend Lord Maude’s work to bring much-needed professional skills, such as commercial, digital and programme management, into the Civil Service, which I found on my return to office, while of course understanding his frustrations at that time.

My noble friend may be interested to look at the Minister for the Cabinet Office’s speech to Reform today. In it, the Minister described how we can improve the Civil Service by encouraging “excellent performance”, by improving its attractiveness to outsiders and “specialist talent”, and by improving skills and management training —one of my noble friend’s own preoccupations. I am confident that these changes will help provide the focus on management and leadership training that the noble Lord, Lord Norton, and I agreed on. I also agree that expressing appreciation for talent and performance can be a powerful and positive driver as part of performance management. I am sure that we will discuss Mr Glen’s proposals further.

I will not comment on pay today, although I think it is a pity that some of the Ministers in this House are unpaid. This discourages some from joining the Front Bench.

The external by default approach to senior appointments is an important step. Data is collected regularly and guidance in the revised Civil Service recruitment framework reinforces this commitment; this includes recording how many permanent recruitment campaigns are advertised externally and where there is a need for a senior Civil Service role on a short-term, temporary basis. As the noble Baroness, Lady Stuart, mentioned, the Minister for the Cabinet Office said today that the Civil Service Commission will review the rigour with which the external by default policy is applied. The noble Baroness also said, I think, that the commission will commence a root-and-branch review of the policy, working closely with the Government. More movement in and out of the Civil Service could be valuable, as the noble Lord, Lord Wallace of Saltaire, said.

During the evidence-gathering stage of the inquiry, there was a lot of focus on the role of the Senior Leadership Committee. The Cabinet Secretary provided the committee with details of the SLC’s membership and its terms of reference; indeed, his letter of 30 August was published on the committee’s inquiry page. However, given the interest and the committee’s request today, I can assure the Committee that the SLC’s details will also be added to GOV.UK; I undertake to do that by next week.

The Cabinet Secretary and the First Civil Service Commissioner agree that the senior appointments protocol needs to be updated to reflect current practice; that work is due to be completed shortly. The Civil Service Commission will consider reviewing the Recruitment Principles, particularly in the light of any implications that the updated senior appointments protocol may have for them.

The Cabinet Office, as the sponsor of the Civil Service Commission, is working closely with the commission and the First Civil Service Commissioner to update its existing MoU. I must tell the noble Baroness, Lady Drake, that that dates back to 2010, I am afraid, not 2020. However, work on a new framework document is well advanced to replace the MoU, in line with the Treasury’s practice for arm’s-length bodies. The Civil Service Commission is of course an independent statutory body. It performs important regulatory functions under the CRaG Act, within an accountability framework to Ministers and to Parliament. The upcoming framework document/agreement will set out the commission’s operational independence and codify and clarify its relationship with the Cabinet Office as its sponsor safeguarding its operational independence. I am well aware of the need to resource this area appropriately.

My noble friend Lady Finn commented on this. I can assure her that the CEO of the commission is line-managed by the commission’s senior sponsor in the Cabinet Office. However, the work of the commission’s CEO and staff is directed by the First Civil Service Commissioner.

On business appointment rules, in a statement in July 2023, the Government announced their response to the report from the Committee on Standards in Public Life, the Nigel Boardman review and PACAC’s work. A number of those reforms, including reforms to the Governance Code on Public Appointments and transparency declarations, have already been implemented. The response outlined plans to reform the business appointment rules, including changes to Civil Service contracts, and, as has been said, the development of a ministerial deed. The Government recognise that any such changes should not deter people from entering public service—we do not want to have a chilling effect. Similarly, it is in the public interest that people with experience of public administration move into other sectors. We intend to keep this proportionate approach, but, to answer the noble Baroness, Lady Drake, this far from simple work is progressing at pace and an announcement will be made in due course.

The Government agree with the committee that HR processes for the performance and misconduct management of Permanent Secretaries are fit for purpose. However, we do not agree with its view that there is scope for the Civil Service Commission to play a role in the dismissal of senior civil servants—we made that clear in our response. Formal HR processes, which sit alongside an individual’s core employment rights, are a matter for the employer. However, Permanent Secretaries should not be removed from their posts without due process, as the Government made clear in our response.

I shall not comment on recent individual exits, as we do not routinely comment on individual HR matters, but these are not decisions which are taken lightly. If the relationship between Ministers and their officials breaks down, swift action must be taken to resolve the situation, stabilise the leadership of the organisation and maintain focus on delivery. Such exits happen from time to time, as we have heard, but they are rare and should be an action of last resort. Since the high-profile exits of 2022, we have in James Bowler a new and experienced Permanent Secretary leading the Treasury and, as was announced recently, General Gwyn Jenkins will become the new National Security Adviser in the summer—we very much look forward to working with them.

A strong relationship between Ministers and civil servants is crucial to ensuring that government functions and delivers effectively. To competently advise the Government of the day and maintain impartiality, civil servants must provide objective, evidence-based advice and take decisions on their merits. We have appointed 11 Permanent Secretaries since the beginning of 2023—that includes specialist Permanent Secretaries—and there has been no difficulty in attracting candidates and no shortage of applicants.

I was pleased to see the report’s conclusion, therefore, that there is no evidence of a trend for the removal of civil servants on political or ideological grounds. However, introducing a criterion of broad political alignment between the Secretary of State and Permanent Secretary, as some have suggested, would complicate the existing duty to serve the Government of the day to the best of their ability regardless of their own political beliefs and would risk undermining their ability to establish the confidence of future Secretaries of State and Governments of different dispositions—I think that there is a lot of support for that view today.

On accounting officers, it is long-standing constitutional practice that each accounting officer is personally and directly responsible to Parliament for the stewardship of resources, against the criteria of regularity, propriety, value for money and feasibility, as the report notes. Their ability to carry out these essential responsibilities effectively must be maintained, and relies both on the impartiality of Permanent Secretaries and on their ability to speak truth to power. A shift towards greater ministerial influence would risk undermining this, but a ministerial direction can be requested on the rare occasions it is required.

The principle of a single Civil Service across England, Wales and Scotland is important, and we have discussed it at a number of Question Times. We acknowledge the arrangement whereby senior civil servants in Scotland and Wales are accountable to the Scottish or Welsh Government but are managed by their Permanent Secretary, who reports to the Head of the Civil Service. It can be tricky to navigate. However, Permanent Secretaries who are accounting officers are subject to HM Treasury rules set out in Managing Public Money, which can include asking for a ministerial direction on the rare occasion one is needed. In addition, the Civil Service Code, which is adopted and adapted in devolved Governments, sets out clearly the expectations for civil servants. Where Permanent Secretaries are asked to work on and spend public funds on matters outwith devolved competence, the Permanent Secretary should raise this with the Cabinet Secretary.

The Government agree with the committee that the principle of a single Civil Service must be maintained. Both sides benefit from interchange. We recognise the strength of the argument that further guidance to tighten up best practice may be due, and it is in the process of being considered. How all our current guidance supports civil servants working in the devolved Administrations on areas that may relate to reserved matters is a key priority, not least to help ensure that the Civil Service Code is maintained.

This has been an interesting debate. We are honoured to have so many experts on this area gathered together in this beautiful Room. I conclude by thanking the noble Baroness, Lady Drake, the members of her committee, the clerk—who is always so important—and all who have spoken in today’s interesting debate. The report was timely, quick, thoughtful and crisp, and we agree with the majority of its findings. The Government agree with the committee that we should not expand the role that Ministers already play in the appointment of senior civil servants, and we welcome its acknowledgement that existing policies for managing the performance and conduct of Permanent Secretaries are generally fit for purpose.

Economic Activity of Public Bodies (Overseas Matters) Bill

Baroness Neville-Rolfe Excerpts

Tuesday 7th May 2024 Lords Chamber

I support the Foreign Secretary’s efforts. I think he is right to focus on these issues and to say that we must give hope to the Palestinians, but the Bill does nothing to enhance our efforts towards a two-state solution. It absolutely has the opposite effect and that is why I supported Kit Malthouse’s amendments. What he said in the other place was right. I hope noble Lords and the Minister will agree with me.

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

I thank the noble Lord, Lord Collins, for his comments. I feel a bit left out as the only person who has not been to Palestine or Israel. I was due to go on 7 October. As we have discussed, this amendment would remove Section 37 from the Bill so that Ministers could by secondary legislation allow public authorities to carry out their own boycott campaigns against Israel, the Occupied Palestinian Territories and the occupied Golan Heights. I am keen to make progress on our line-by-line consideration of the Bill, but I think I should briefly repeat that this legislation has three objectives: first, to uphold the integrity of British foreign policy decided by the Cabinet collectively on advice from the FCDO and others; secondly, to enable public authorities to focus on their core functions when delivering for the public on investment and procurement and to avoid damage to community cohesion; and, thirdly, to prevent the most divisive of these campaigns by public authorities which target Israel in particular and promote anti-Semitism in the UK.

We have seen the disturbing things happening in our universities today, with Jewish students not feeling safe, and what has happened in some local authorities in recent years. Our manifesto commitment and this Bill seek to address one aspect of the current troubles, including divestment campaigns. We need to find a way through. I am grateful for the suggestion of meetings between now and Report.

This amendment introduced by the noble Lord, Lord Warner, would allow Ministers to negate by secondary legislation the key objective of our primary legislation. That would not be right. We have heard from the Jewish Leadership Council and the Board of Deputies of British Jews, mentioned by my noble friend Lord Leigh, about how the BDS campaign singles out the world’s only Jewish state for unique treatment, and we heard in the Public Bill Committee of the distress felt by the Jewish community when Israel is targeted in such a manner by public authorities that, it seems to it, in no other case attempt to pursue foreign policy. These anti-Israel BDS campaigns do very little to promote peace in the Middle East, while sowing division and distrust in the UK.

I want to take the opportunity of our discussion of international issues to return briefly to the question raised earlier by the noble Lord, Lord Purvis. He asked whether public authorities would make the judgment of whether a procurement or investment decision risked putting the UK in breach of international law. Public authorities would make that judgment. They would need to do so to the existing legal standard of reasonableness and would be subject to the enforcement powers in the Bill if they did not. I have committed to taking away and considering carefully the points made about international law today, and I look forward to returning to that issue on Report.

Let me return to my overall case. The purpose of Clause 3(7) is to give Parliament the ability to scrutinise a future ministerial decision that would reverse a core objective of this legislation. Such a decision could have a very harmful effect on community cohesion while doing very little to advance peace and security in the Middle East. The amendment would allow Ministers to use secondary legislation to negate the key objectives. That would undermine parliamentary sovereignty. Should a future Government wish to allow such campaigns by public authorities, they should go through the same legislative scrutiny that this Government are going through to prevent them. The Government have ensured in the Bill that the scope of delegated powers is appropriately limited and that the core of the Bill cannot be altered by statutory instrument. In addition to this clause, we have limited the ability of the Secretary of State to remove local authorities, UK and devolved government Ministers and local government pension schemes from the scope. I also want to highlight that we have not received any challenge from the Delegated Powers and Regulatory Reform Committee with regard to the Bill.

We should be in no doubt that preventing BDS campaigns by public authorities against Israel, the Occupied Territories and the occupied Golan Heights is a core part of the Bill. This is due to the impact that such campaigns can have in contributing to and legitimising anti-Semitism, as highlighted by the noble Baroness, Lady Noakes.

However, it is important to note that nothing in the Bill changes our foreign policy in regard to these areas. We do not recognise—I emphasise this—the settlements as part of Israel. Our position is reflected in our continued support for UN Security Council Resolution 2334. The Government’s position is that the Bill is in compliance with that resolution. My noble friend Lord Wolfson explained well why this is the case, and why Israel can, and should, be treated differently, reflecting the way that it is often singled out for unique treatment by many others.

[Lord Purvis of Tweed (LD)]

I am grateful to the Minister for giving way. She is responding very carefully to this debate. It is the Government’s position that the Occupied Palestinian Territories are a separate legal entity that the Government of Israel do not represent. Indeed, the UK has its own direct bilateral relationships with the representatives of the Occupied Palestinian Territories. Have they asked for the particular protections under this clause?

[Baroness Neville-Rolfe (Con)]

My Lords, our position on the Middle East peace process, which I am not sure entirely answers the noble Lord’s question, is that we support a negotiated settlement leading to a safe and secure Israel, living alongside a viable and sovereign Palestinian state, based on 1967 borders with agreed land swaps, Jerusalem as the shared capital of both states, and a just, fair, agreed and realistic settlement for refugees.

My noble friend Lord Ahmad updated the House earlier on Gaza. The Prime Minister has told Prime Minister Netanyahu and regional leaders that we are deeply concerned about the prospect of a military offensive in Rafah. The immediate priority must be a humanitarian pause in the fighting, which is the best route to secure the safe release of hostages and significantly step up aid to Gaza.

[Lord Purvis of Tweed (LD)]

I am grateful to the Minister for giving way. With respect, she has not answered my question. The Government do not recognise the Government of Israel to represent the Occupied Palestinian Territories in our discussions with their representatives. I ask in clear terms, since we are at the stage in this legislation where it has to be crystal clear, have the representatives of the OPTs requested the protections under the Bill in this clause?

[Baroness Neville-Rolfe (Con)]

I am clear that the Occupied Territories are separate. I think that that three-quarters answers the noble Lord’s question but let me reflect further. I certainly would not want to mislead him on such an important point.

[Lord Collins of Highbury (Lab)]

Can I also ask a question? The Minister mentioned that the Delegated Powers Committee did not comment on the Bill in a negative way. On the point about the amendment on free speech, I know that we have other clauses to deal with it, but the Constitution Committee was quite clear that Clauses 4(1)(a) and 4(1)(b) unduly limit freedom of speech by preventing public bodies from stating that they would—or even might—make a procurement or investment decision. That committee asked this House to consider whether Clause 4 should be removed from the Bill, so the Minister’s assertion is not quite true. Regarding the amendment tabled by the noble Lord, Lord Warner—the Constitution Committee shares some of his views.

[Baroness Neville-Rolfe (Con)]

Clearly, I do not think that we will be able to agree on this this evening. I replied to the excellent report by the noble Baroness, Lady Drake, and the Constitution Committee, and I will refresh my memory on that, if the noble Lord will allow.

In the meantime, in response to the noble Lord, Lord Purvis, who asked about the Government’s position on Gaza—it is that Israel remains the occupying power in Gaza, as advised by the FCDO.

[Lord Collins of Highbury (Lab)]

Yes, but does the Minister know why it says that? It is because an occupying power has duties—particularly under international humanitarian law—which is why the Foreign Secretary is monitoring this and has repeatedly said to the House that he will continue to monitor it. Israel has duties as an occupying power.

[Baroness Neville-Rolfe (Con)]

Indeed, in situations of occupation, international humanitarian law expressly requires the occupier—I think this is the point that the noble Lord is making—to the fullest extent of the means available to it, to ensure food and medical supplies for the population of the occupation territory. We expect Israel to fulfil its obligations, and for all parties to adhere to humanitarian law. I am glad to be able to repeat that.

Nothing in the Bill changes the Government’s support for a two-state solution. We believe that open and honest discussions, rather than imposing sanctions or supporting anti-Israeli boycotts, best support our efforts to help progress towards a negotiated solution. This is the position shared by the whole Government. But I continue to believe that it is important to retain for Parliament the ability to scrutinise a decision that would be so detrimental to community cohesion, through primary legislation and subject to full parliamentary scrutiny. I therefore respectfully ask that the noble Lord withdraw his amendment.

[Lord Warner (CB)]

I am glad it was “respectfully”, but I am totally unconvinced by what the Minister has said, just as, for the reasons given by the noble Lord, Lord Collins, about Clause 4, I was totally unconvinced in the previous discussion about my Amendment 48.

--- Later in debate ---

[Baroness Chapman of Darlington (Lab)]

I have the agreement that Goldsmiths made in front of me, and the noble Lord, Lord Leigh, is right. One of the six issues concerns BDS, but I suggest that he read the wording very carefully. It says that the senior management team will raise concerns with the college’s ethical investment fund manager; it is not saying that it will enact any divestment at this stage. I read the agreement very carefully, not least because I thought that it may have made a decision that undermined my case this evening. I would be very happy to meet with the noble Lord and discuss this further, because it leaves the door open, perhaps, to Goldsmiths taking the decisions that he fears it might. It does not look as if it has done so far, but even if it does not and were prevented from even discussing that, there would still be the other six elements that were driving the campaigns, the sit-ins and the activities on campus which were so problematic.

[Baroness Neville-Rolfe (Con)]

My Lords, I thank all noble Lords for their contributions and am very grateful to the noble Baroness, Lady Chapman, who has sat patiently throughout today for her contribution.

I do not think that sufficient weight has been given to the pressure on universities to engage in boycotts and divestment campaigns at this time. I am disturbed, as I am sure we all are, by the violence we have seen in the US over the past week, and the threat that that poses for the safety of students and their ability even to complete their exams. We cannot risk this in the UK and the associated intimidation of Jewish students. Sadly, we have begun to see a fresh wave of student demonstrations at our UK universities, including protest camps set up in Oxford and Cambridge, a deterioration that the noble Baroness acknowledged. These protesters have, I understand, been demanding that their universities cut financial ties with Israeli companies.

My noble friends Lord Willetts and Lord Johnson asked about examples of BDS activity in universities, and I have answered questions on this, as has been said. But another example was highlighted this evening by my noble friend Lord Leigh of Hurley, that of Goldsmith University, which has agreed to demands made by one of its student-led groups, Goldsmiths for Palestine, to review its ethical investment policy. I am glad that further discussions might take place, and I would be interested to see the document.

As my noble friend Lady Noakes said, there is a problem of anti-Semitism in universities, and we need to take this small step to head off BDS, which is a manifesto commitment, to answer the noble Baroness, Lady Blackstone. We are clear that universities should be in scope of the Bill, despite the oratory and expertise of my noble friend Lord Willetts. We have worked together on good government for many decades, and his contribution is welcome.

No noble Lord wants to inhibit the freedom of students and individual academics to express their views on the conflict in the Middle East, or, indeed, on any other difficult conflict, in a civil manner. Universities have always been the natural home for open debate, and that will continue. There is no thought control—we are talking about public authorities’ investment and procurement decisions when focused on a particular country or territory. The noble Baroness, Lady Falkner, would not herself be affected and university pensions are not in fact within scope.

However, it is the case that universities are part of public life. They have a responsibility to deliver education for their students, and in this context the Bill strikes a reasonable balance. It bans universities from carrying out their own boycott and sanction campaigns when they are exercising their public functions of investment and procurement. It does not deal with the private acts of individual academics, nor does it interfere with the private commercial activity of university bodies. However, it is a sad fact that in 2023, the Community Security Trust recorded 182 anti-Semitic incidents in the context of the higher education sector, an increase of 203%.

I pay tribute to the noble Lord, Lord Mann, particularly for his fervent advocacy regarding anti-Semitism. The Education Secretary is hosting a round table at No. 10 on 9 May with a number of vice-chancellors to discuss how we can prevent and crack down on anti-Semitism on campus.

Where student unions and pressure groups demand that universities engage in BDS campaigns, this Bill will help universities remain focused on their core public duties, rather than becoming agents for a pressure group. Indeed, the Bill will discourage these campaigners’ demands in the first place by removing the chance of success.

I hope this provides some context on why the Bill should apply to universities. It is supported by representatives of the Jewish community in the UK, including the Jewish Leadership Council.

Economic Activity of Public Bodies (Overseas Matters) Bill

Baroness Neville-Rolfe Excerpts

Committee stage
Tuesday 7th May 2024 Lords Chamber

[Lord Collins of Highbury (Lab)]

My Lords, I say to the noble Baroness, Lady Noakes, that I wish the Bill was specific and addressed the manifesto commitment of the Conservative Party. The Labour Party has made it absolutely clear that we are opposed to boycotts, disinvestment and singling out Israel. The problem with the Bill is that it is wide. It covers all kinds of issues that will place public bodies in a very difficult position. In the debate on this group of amendments, we have senior legal people all saying basically the same thing: this will end up in court. When that fear of ending up in court occurs—when people read a law and say, “This is so complicated that we don’t know what it means; it will end up with us in court”—what happens then? It is the chilling effect. There will be decisions made not in the interest of the public body but on the basis of it not being sure that it is capable of making this decision. That is the important thing.

I support my noble friend’s amendment on extending the exceptions. The Schedule lays out other obligations on public bodies, not least very positive legislation that this Government have implemented on modern slavery, on other international law issues, on labour-related misconduct and so on. They are naturally there because these public bodies have already been told that these obligations are on them. There will be a lot of confusion. I agree with my noble friend’s point about taking into account potential breaches of international law by the UK but not those by other countries in the supply chain. Most of our experience of labour issues is that those supply chains can be incredibly convoluted. You do not know the origin of certain products. We have had debates in this Chamber about the use of cotton grown in Xinjiang by slave labour and being sold in British shops. Companies have decided to find out where that goes.

My noble friend also raised the Rana Plaza disaster of 2013. I remember it well, and I am sure that the Minister does, too, because many of our retail companies were selling products made in factories that were incredibly unsafe and used child labour. That disaster will stay in my mind. The government response at the time was, “There are potential breaches of international law. We will give the ILO extra money to go and investigate Bangladesh so that it commits to its proper responsibilities”. We did that.

The Government in this legislation are saying, “There are all sorts of factors that we can’t take into account—and even if we can, there are exceptions, the Secretary of State has to be involved, and we know it’s going to end up in court.” That is the problem with this legislation. It is not straightforward dealing with BDS. I wish it were. We will come on to that in the other group.

I have been trying to work out at what point I should read out the guidance on the Occupied Territories in Palestine that the Government have issued to companies. I say to the noble Baroness, Lady Noakes, please read it. The noble Baroness is nodding; she has read it. Great. I shall read it into the record, although it may take longer than the 10 minutes I am allowed.

“The UK has a clear position on Israeli settlements: The West Bank, including East Jerusalem, Gaza and the Golan Heights have been occupied by Israel since 1967. Settlements are illegal under international law, constitute an obstacle to peace and threaten a two-state solution to the Israeli-Palestinian conflict. We will not recognise any changes to the pre-1967 borders, including with regard to Jerusalem, other than those agreed by the parties … There are therefore clear risks related to economic and financial activities in the settlements, and we do not encourage or offer support to such activity. Financial transactions, investments, purchases, procurements as well as other economic activities (including in services like tourism) in Israeli settlements or benefiting Israeli settlements, entail legal and economic risks stemming from the fact that the Israeli settlements, according to international law, are built on occupied land and are not recognised as a legitimate part of Israel’s territory. This may result in disputed titles to the land, water, mineral or other natural resources which might be the subject of purchase or investment … UK citizens and businesses should be aware of the potential reputational implications of getting involved in economic and financial activities in settlements, as well as possible abuses of the rights of individuals. Those contemplating any economic or financial involvement in settlements should seek appropriate legal advice”.


That is the Government’s advice, recently issued. As the noble Lord, Lord Deben, said, we are saying that there is one policy for the private sector and another for the public sector. That is absolutely crazy. There are so many contradictions in this legislation that it beggars belief. I hope that the Minister will think hard about the complex nature of the Bill, and perhaps give it due consideration. I shall not repeat my comments on the next group, but we have often said, “Let’s sit down together and come to a solution that meets the requirements that were set out in the manifesto”. This legislation does not; that is why it is so wrong.

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

My Lords, I will address the various amendments tabled in relation to international law. If the Committee is content, I will start by addressing Amendment 31, tabled by the noble Lord, Lord Hendy. It is a wide-ranging amendment, as some have said, which would allow public authorities to choose not to procure a good, service or works if their manufacture, provision or supply may have involved a breach of international law. Where a judgment has been made that a party has breached international law, it is for the Government and not a public authority to determine the appropriate response. This amendment would give public authorities too much discretion to engage in boycotts and divestment campaigns and would undermine the legislation.

--- Later in debate ---

[Lord Deben (Con)]

My noble friend is saying that, if a regime controls by force and in the most terrible way the whole economics of a nation, I can advise a private company not to deal with it and remove itself from it, but a public body could not say, “I will not trade with or buy from Myanmar”, unless the Government decide that they will not deal with Myanmar in that sense. I find that morally extremely difficult to take. We are asking private people to do things—I am sure the Government would support that—but we are going to exclude those who are democratically elected or who are looking after, for example, a university. I find that very difficult to take.

[Baroness Neville-Rolfe (Con)]

We are of course dealing with investment and procurement and the public bodies themselves.

Perhaps I should respond to the noble Lord, Lord Collins, who mentioned the Occupied Territories, which we will be coming back to on later amendments. Although the Government recognise the risks associated with—

[Baroness Blackstone (Lab)]

My Lords, I am sorry to interrupt the Minister, but I am perplexed by her view that foreign policy is simply a matter for central Governments. Foreign policy affects the population of the UK; it affects thousands of institutions in one way or another. We live, after all, in a global world. We do not live in a completely isolated country with no contact with the rest of the world. Foreign policy is not just something that can be determined and administered entirely by central government without the engagement, involvement and acceptance of those policies by a very large number of public and private institutions and individual members of this country.

[Baroness Neville-Rolfe (Con)]

I note what the noble Baroness says, but the Bill does not change UK foreign policy. That is for FCDO and the UK Government to decide. This applies only to public authorities and to investment and procurement, which I have continued to emphasise, because I think some of the discussion is needlessly wide-ranging—and, if I may, I will now make progress.

The Government, as I was saying, in relation to the Palestinian Occupied Territories, recognise the risk associated with economic and financial activities in the Israeli settlements, but we do not support boycotts of the Occupied Palestinian Territories. They are inherently divisive and may lead to inadvertent negative effects on Palestinians, as well as undermining the aim of the Bill, which is to ensure that we speak with one voice internationally. None of this changes existing government guidance.

[Lord Collins of Highbury (Lab)]

This is a fundamental point. I have made clear the Labour Party’s position on boycotts. We are talking about investment in factories in illegal settlements in the Occupied Territories. What is the noble Baroness saying to a public body that realises that an investment it had has suddenly transferred from Jordan to a factory in the Occupied Territories? Is she saying that that public body cannot say that the investment is in breach? It causes reputational risk and could fundamentally affect the value of the investment, because it is illegal. What is the noble Baroness saying: that we are going to put it in this Bill, come what may, because that is the foreign policy? It makes no sense to me at all. The Government are talking with two voices. The FCDO is saying one thing and this Minister is saying something completely different.

[Baroness Neville-Rolfe (Con)]

I do not think there is a difference between us and the FCDO. If I may, I will move on to the other amendments, because I am trying, as I always do, to answer the questions noble Lords have asked. There are a number of different amendments in this group, and I think we should look at them in the round. I will turn to Amendments 18, 28 and 29.

I will start with Amendment 28, which is a probing amendment tabled by my noble friend Lady Noakes, which would remove paragraph 6 of the schedule. She said that was a direct approach. I thank her, more generally, for her support for this legislation and for providing this opportunity to explain why this provision was included in the Bill. Paragraph 6 of the schedule makes an exception to the ban for considerations that a decision-maker in a public authority reasonably considers to be relevant to compliance with the UK’s obligations under international law.

Amendments 29 and 18, as the noble Lord, Lord Verdirame, has explained, would remove the existing exception and replace it with a narrower exception that would only allow public authorities to consider international law in a way that is influenced by moral or political disapproval of foreign state conduct, in line with regulations made by the Secretary of State. I would like to thank him, and my noble friend Lady Noakes, and the noble and learned Lord, Lord Etherton, for raising this matter. I acknowledge the noble Lord’s and my noble friend’s valuable expertise in this area— of course, they have the support of the noble Lord, Lord Pannick, who is not in his place, my noble friends Lady Altmann and Lord Wolfson.

There are very limited examples of when this clause might be relevant to public authorities, such as when abiding by sanctions under international law. It is therefore intended as a safeguard. I appreciate the noble Lord’s concern that public authorities could make their own subjective interpretations of foreign policy that are not aligned with the foreign policy of the UK Government. This exception can only be exercised by public authorities in a way that is “reasonable”. It would be up to the enforcement authority, or the courts, to determine whether the exception was exercised reasonably.

However, I appreciate noble Lords’ various concerns on this matter, including the impact on the courts, and the Government will consider these. We will no doubt return to the international law issue on Report. I thank noble Lords for their insightful contributions—

[Lord Purvis of Tweed (LD)]

Can I press the Minister on that? My understanding is that, under the Bill, in the absence of a Minister or the Government coming to a determination that international law has been breached, a decision-maker in a public authority can make the decision that there is the potential of a breach. Therefore, a decision-making body at the moment, for example—because Ministers are warning the Israeli Government that their actions in the West Bank and Occupied Territories are potentially in breach of international law—would be permitted under Schedule 6 to make a decision not to invest.

[Baroness Neville-Rolfe (Con)]

I am not sure that I entirely understand the noble Lord’s question, but I will reflect on it. We will come relatively shortly to a group that will look at these issues more broadly. If I am able to do so, I will come back to him at that point.

As I have already said, various concerns have been raised, which we will consider. I thank all noble Lords for their contributions. I say to the noble Lord, Lord Deben, that we value this House’s expertise, as I said at Question Time only last week. The Government will continue to think carefully about the important points that have been made. I hope the noble Lord will feel able to withdraw his amendment.

[Lord Verdirame (Non-Afl)]

My Lords, I thank all noble Lords who have taken part in this debate. The key driver behind our amendments was a concern about clarity, as the noble Lord, Lord Deben, pointed out. International law is not just a law but an entire legal system, so to say that you cannot breach international law is like saying that you cannot breach Chinese law. The legislative instruction has to be more specific than that. That is the essence of our concern.

I do not think the power we are proposing in my amendments, supported by the noble and learned Lord, Lord Etherton, would be excessive, as suggested by the noble Lord, Lord Oates. We have other examples of that in the legislation. As for the Minister’s comment on sanctions, we already have powers in legislation to deal with sanctions, so there would not need to be an international law exception on such a broad and unlimited basis to cover that situation; we already deal with that in our existing legislation.

I thank those who supported our amendments and analysis, in particular the noble Baronesses, Lady Altmann and Lady Noakes, and the noble Lord, Lord Wolfson of Tredegar. I look forward to the proposals that the Minister said she would consider bringing forward on Report. With that, I beg leave to withdraw.

House of Lords: Reform

Baroness Neville-Rolfe Excerpts

Wednesday 1st May 2024 Lords Chamber

[Lord Campbell-Savours]

To ask His Majesty’s Government what proposals they are considering to reform the House of Lords, in particular with regard to the size of the House.

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

My Lords, I start by sharing the sadness at the sudden death of Lord Stunell.

The House of Lords plays a crucial role by scrutinising, debating and holding the Government to account. However, reform, including in relation to the size and membership of this House, is not a priority in this Parliament.

[The Lord Speaker (Lord McFall of Alcluith)]

My Lords, the noble Lord, Lord Campbell-Savours, is participating remotely.

[Lord Campbell-Savours (Lab) [V]]

My Lords, I will ask a very simple question. Due to the ageing nature of Labour’s membership of the House, we are now down to as few as 100 Labour Peers regularly attending proceedings. Meanwhile, the Government are openly challenging the excellent and well thought-through Fowler-McFall reforms with a stream of their own introductions, bringing the Conservative membership to nearly 300. If a Labour Government are elected, how can we possibly secure the public business against a background of such overwhelming odds? Is the Government’s strategy to fill the House to capacity and make it difficult for Labour to appoint without further breaching the reforms?

[Baroness Neville-Rolfe (Con)]

I thank the noble Lord for his Question. On the numbers, we now have 787 Members. The Conservatives have 277 Members, 35% of the House. As the noble Lord points out, the Labour Members are fewer: 172 Members, 22%. But the appointments that have been made, which he referred to, have not changed the dial. It is still hard for the Government to get their business through the Lords, and the numbers fall a long way away from the make-up of the House of Commons, where 53% are still Conservatives. Our priority is to ensure that this House continues to play its important role in scrutinising and revising legislation, which is what the country wants the House of Lords to do.

[Lord Beith (LD)]

I thank the Minister for paying tribute to our dear colleague, Andrew Stunell, whom we have lost.

Given that the Government have no time left in this Parliament for fundamental reform—I agree on that—why have they continued to appoint Peers at a rate that clearly prejudices any claim the House has to be generally representative? There have been 74 new Peers. Is the Government’s intention to maintain a situation in which they can always dismiss the views represented by the House of Lords when it is arguing with the Commons, on the grounds that we are not sufficiently democratically representative?

[Baroness Neville-Rolfe (Con)]

I did not give the Liberal Democrat numbers, but there are 80 Liberal Democrat Members—10% of the House—which is a lot more than in the House of Commons. It is important that we continue to refresh the Benches in this House. There has been a good process of parties encouraging retirements at the right stage. Sadly, we lose people; we have just lost Lord Stunell, and we lost Lord Field last week. It is necessary to continue to make appointments, and it is the Prime Minister’s prerogative to advise the sovereign as to who should join this House. There have been some recent appointments to the Labour Benches, which I very much welcomed.

[Lord Forsyth of Drumlean (Con)]

My Lords, further to that last question, is it not the case, as my noble friend pointed out, that the one party overrepresented in this House is the Liberals? Is it not also the case that the Government lost at least two votes this week because of people voting remotely?

[Baroness Neville-Rolfe (Con)]

The noble Lord is right that it has been an extraordinary week in that we have had such close votes. I agree with the general sentiment of what he is trying to say. What is really important about this House—people who admire this House say the same—is that we have a different, unique mix of expertise, age, where people come from and the jobs that they have done; some are part-time while others, such as the Front Benches, turn up regularly. That makes for better legislation and better policy-making.

[Baroness Chapman of Darlington (Lab)]

My Lords, I express from these Benches our sadness at the loss of Lord Stunell, a dedicated public servant; our thoughts are with his family and friends, and especially his friends and colleagues on the Liberal Democrat Benches.

Is the Minister comfortable with the fact that when Labour left office in 2010, there were 24 more Labour Peers than Conservative Peers serving in your Lordships’ House, while today, after 14 years of Conservative government, there are over 100 more Peers on the Government Benches than on the Labour Benches? Does she think this disparity is in the interests of the House?

[Baroness Neville-Rolfe (Con)]

It is important that the House is refreshed, and I have already explained that the current Prime Minister recently encouraged Labour to put forward candidates for peerages—I am particularly pleased to see the noble Lord, Lord Hannett, with whom I used to work when we were in retail together. The numbers change over time. There are large numbers on the Cross Benches as well as on the party Benches. We have to make sure that we scrutinise the legislation, do our job and refresh the House from time to time. I am grateful for the work that all the parties have done in encouraging retirement and supporting new people to join this House with new perspectives.

[Lord Trees (CB)]

My Lords, in considering changes to the House of Lords, many advocate an elected Chamber. But I suggest that it is usually good practice, before determining the composition of any group, to first consider its function—function before form. I think many would agree that the function of this House, as articulated by the Minister, is as a scrutinising, revising Chamber to make legislation better. In considering that, does the Minister agree that an appointed Chamber, as now, is better placed to deliver that function than an elected Chamber?

[Baroness Neville-Rolfe (Con)]

I agree that an elected Chamber has problems, because there would inevitably be a clash with the Commons and indeed the devolved legislatures. An appointed Chamber allows the Commons to prevail constitutionally and serve constituents across the country. Reform is not ruled out in the longer term but we have been very clear, certainly ever since I joined the Front Bench, that we should not have piecemeal reform and that any reform should be very careful, considered and comprehensive.

[Lord Sherbourne of Didsbury (Con)]

My Lords, I remind the House of one of the greatest reforms of the House of Lords, which I am sure the vast majority of noble Lords agree with, brought in by a Conservative Government—the Life Peerages Act in the 1950s.

[Baroness Neville-Rolfe (Con)]

I agree with my noble friend, who always has good historical angles, that the Act was a great move forward. Many of us who are lucky enough to serve in this House benefit from that excellent constitutional change.

[Lord Mackenzie of Framwellgate (Non-Afl)]

My Lords, surely our objective is the reduction of the number in the House, which is continually criticised outside this place. Can we not revisit the excellent report submitted some years ago by the noble Lord, Lord Burns, who is in his place? Can we not persuade Governments at least to abide by that report or stop complaining about the size of the House?

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[Baroness Neville-Rolfe (Con)]

I pay tribute to the work that the noble Lord, Lord Burns, and his committee did, but a number of Administrations have not signed up to those recommendations and have not wanted to move in the direction of a cap. I think I understand why. You want to focus on the number of Peers who attend, not simply the overall figure. As I have tried to explain, we have a mixture of full-time Peers and some who contribute only occasionally but bring unique insights to what they do. It is a little unclear, when people are made Peers, whether they will not come very often—which is certainly what I intended when I became a Peer—or end up contributing in a very substantial way, particularly at different parts of their career.

[Baroness Hayman (CB)]

My Lords, the Minister talked eloquently about the important role of this House, but why will the Government Front Bench not recognise that public opinion on the role of this House and the quality of its work is diminished badly by the criticisms of its size and the appointments process by which people get here? Will she not reconsider her view about piecemeal reform, which is the only way we ever get anywhere in this House, and look at having a statutory appointments commission with proper scrutiny powers over appointments?

[Baroness Neville-Rolfe (Con)]

There were a lot of points there. There are many ideas for reform, some of which have a lot of merit, but to take the final point about making HOLAC statutory, I do not favour that. It is the prerogative of the Prime Minister and the sovereign to appoint. We really value the work done by HOLAC and its new chair, the noble Baroness, Lady Deech, in ensuring the propriety of proposals that come forward, but we do not believe we should move the composition of the House away from nomination by a democratically elected person to a more corporate model. That would be a mistake. On the popularity of the House of Lords, when you talk to people about the work we do, they are much more understanding. We need to get about and explain the work we do in revising legislation and in helping the country to come to better conclusions on matters of policy.

Economic Activity of Public Bodies (Overseas Matters) Bill

Baroness Neville-Rolfe Excerpts

Committee stage
Wednesday 17th April 2024 Lords Chamber

[Baroness Chapman of Darlington (Lab)]

My Lords, I am grateful to the noble Lord, Lord Wallace, and the noble Baroness, Lady Noakes, for their amendments in this group. They are incredibly helpful. What we are trying to do here, as the noble Baroness, Lady Noakes, has just said, is elicit some certainty from the Government on behalf of those organisations which might find themselves drawn into the scope of this Bill. Even though they may not consider themselves to be public bodies ordinarily, they might find that they are when it comes to this Bill. We will come later to an argument about whether universities should be treated as public bodies and we feel, as we said at earlier stages, they should clearly not be. But that is not the only area where we feel that the Government have not thought sufficiently about what they are trying to do.

Amendment 11 from the noble Baroness, Lady Noakes, would, as she explained, apply the definition in the Freedom of Information Act. That would settle this to a large extent, in that we are clear about who is and who is not subject to that Act. It would be interesting to hear whether the Government are minded to welcome that suggestion because, from what the Minister has said on previous occasions, all the instances that she has referred to as justifying the need for the Bill would probably be covered. I am not sure why the Government do not just welcome that, to be honest; it does not answer all of our problems, but it would go some way towards that.

The introductory speech of the noble Lord, Lord Wallace, was incredibly helpful and his amendments likewise. He concluded by saying he suspects that the Bill is actually performative in nature and worries that the operability is not at the forefront of anybody’s mind in government. I have no idea how true that is, but I share his concern that it is the job of this House to make sure that we do not pass legislation that is unworkable and just causes confusion.

Our Amendment 14 is probing and I accept what the noble Baroness, Lady Noakes, had to say about it. But we are just trying various ways in this group—and in the next, too—to work out which organisations will be subject to these new rules. The example that has been helpfully provided to me by Universities UK was the one that led to the tabling of our Amendment 14.

If the Government get their way and universities are to be treated as public bodies for the purposes of this Bill, although I very much hope not for any other purpose, their activities that we could argue are clearly outside their publicly funded responsibilities—those conducted, perhaps, with private money or are contracted to private companies—would in no way be subject to the rules within the Bill. There is a reference that makes this clear in the Explanatory Notes, but the amendment that we have suggested would put that explanation into the Bill. As I said, it is to probe exactly what the situation would be because, at the moment, universities are not clear about that and it is important that we give them that certainty.

An example was suggested to me by Universities UK. It is hypothetical but not so outlandish that this situation is not happening very frequently. I declare an interest as chancellor of Teesside University. Here is the hypothetical example: university A is considering a proposal to set up a transnational education partnership in country X. This could involve a partnership with a commercial or state entity in country X and the university board must consider a range of proposals. According to the Higher Education Code of Governance, governing bodies should

“conduct their affairs in an open and transparent manner”.

It is a fundamental duty of university governing bodies to safeguard and promote the reputation of the institution. As the new partnership would involve a significant investment and carry both financial and reputational risks, the board of university A is therefore asked to take a decision on the proposals.

To support its deliberations, the board would receive a paper covering the following: the potential financial exposure and opportunity of each proposal; underlying social, demographic and economic data that underpins a market assessment; due diligence on potential partners, including reputational factors; and a summary of ethical and reputational concerns relating to country X. All aspects of the paper would be deliberated by the board. Following an extensive discussion of the financial and reputational impacts of the proposals, the board decides not to proceed with the partnership opportunity because, on balance, the risks are deemed to outweigh the opportunity.

Can the Minister explain whether, in this example, the transnational educational partnership described constitutes a private or public activity of a university? Would the fact that the board discussion included reference to reputational and ethical concerns of direct relevance to a higher education institution mean that members of the board could be subject to action under the provisions of the Bill?

How can boards fulfil their duty to safeguard and promote the reputation of their institution if they are not able to openly discuss and consider material facts that could impact on said reputation without fear of legal action, even if those considerations are not the sole basis for the eventual decision? How can boards fulfil their duty to conduct affairs in an open and transparent manner if the very fact of discussing issues of demonstrable and material relevance would be actionable under the provisions of the Bill?

I raise this example to tease out some of the grey areas that we might be forcing universities to consider and because I am worried about the chilling effect this may lead to. I do not think there is a situation in which a university would not consider the reputational impact of a partnership. But I can conceive of a situation where that consideration would not be as open and as widely shared as we have come to expect, in the way that we would like things to be done in this country.

In this group, we would like to understand the Minister’s response to the amendment from the noble Baroness, Lady Noakes, in particular, on whether there might be any other way of making clear who is subject to this. In relation to my Amendment 14, I would like to understand exactly how this will work for organisations—not just universities, but others as well—particularly in relation to the example I raised.

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

My Lords, I am grateful for the thoughtful contributions from across the Committee. On the first day of Committee, which also touched on the scope of this Bill, we heard from the noble Lords, Lord Collins and Lord Wallace, the noble Baroness, Lady Fox, and my noble friends Lady Noakes and Lord Johnson. We discussed the Bill’s application to hybrid public authorities. Today, we have heard in slightly different terms from the noble Lord, Lord Wallace, my noble friend Lady Noakes and, of course, from the noble Baroness, Lady Chapman. I will try and come back on her essay question if I can.

Obviously, we have carefully considered the points raised in these debates. I would like to expand on our view of the scope in relation to Amendments 10, 11, 12, 13 and 14. As noble Lords have said, the Bill will apply to public authorities, as defined in Section 6 of the Human Rights Act 1998. I would like to explain, in response to the concerns of the noble Lord, Lord Wallace of Saltaire, that “public body” is a general term with no single legal definition. The Bill’s Short Title provides a general indication of the subject matter of the Bill, and it is not unusual for the Short Title to use different terminology from the Bill’s substantive provisions.

[Lord Wallace of Saltaire (LD)]

My Lords, I apologise for interrupting. The Minister will be well aware that there is a particular use of the term “public body” by the Office for National Statistics, which means that debt incurred by a public body is counted as part of the national debt. That means that whether or not some of these hybrid public authorities are defined as public bodies matters a great deal to their financial planning. Again, the university sector is particularly concerned about this.

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[Baroness Neville-Rolfe (Con)]

I thank the noble Lord for raising that point again. It has been raised before and I am aware of it. We are talking about quite marginal sums here, so it will not be definitive, but I am sure we will come back to that point.

Perhaps I should explain that we have used the HRA definition because it has three important advantages. First, it is one that has been on the UK statute book for over 25 years, as has been explained, and places public authorities under important fundamental obligations that they have to observe. Organisations should also already know how it applies to them. Secondly, over those 25 years, the courts have further clarified its scope and identified a number of relevant factors. These include, but are not limited to, the body receiving a significant amount of public funding, the body carrying out acts in exercise of statutory powers and the body providing a public service. Thirdly, the definition ensures that private activity remains out of scope of the Bill—private activity that is rightly protected by convention rights, including freedom of speech.

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[Baroness Chapman of Darlington (Lab)]

I am grateful to the Minister, but I am completely unclear about what a public body is after listening to that. Could she explain what a public function is? That might help us.

[Baroness Neville-Rolfe (Con)]

That is a good point and a good question. The noble Baroness also gave a good example. I suggest that I take away the distinction regarding the public function and have a look at it, and that I come back on the long example she raised, which she said had been given to her by Universities UK, on 7 May when we are due to debate the university amendment in Committee.

[Baroness Chapman of Darlington (Lab)]

I sort of accept that, but while my example referred to universities we could equally apply it to other organisations as well. I would not want to see that consideration narrowed just to the issue of universities.

[Baroness Neville-Rolfe (Con)]

I agree with the noble Baroness; that is an entirely fair point. We agree that the Bill is complex when it comes to understanding. I want to make sure that, when I answer questions on things such as public functions, I am giving good information that is thought through and thoughtful. I have tried to explain today why we are using the Human Rights Act. That has advantages, which is why the Government have gone down that road.

I should respond to the point about cultural institutions that the noble Lord, Lord Wallace, raised. Some of them are in scope of the Bill in their public functions only, and I set out earlier a number of factors that courts would consider in deciding whether an act was a public act. The noble Lord also pointed out that the Bill contains the power to exclude bodies in its scope from the ban via regulations. The Government do not currently foresee the need to exclude such bodies, but this power will allow the Bill to evolve in line with government policy.

For all these reasons, I have tried to explain why we have presented the Bill in the way that we have. There is a lot of comfort to be taken from using the Human Rights Act, but I look forward to returning to some of the questions that have been asked. In the meantime, I ask noble Lords not to press their amendments.

[Baroness Blackstone (Lab)]

If I may intervene, this definition debate is like walking through a giant sticky pudding. Most Members of the Committee are utterly confused about exactly what public bodies and public authorities are, and about which institutions will be in the scope of the Bill and which will not.

I shall raise a specific example. Could the Minister tell the House about housing associations? They undertake many public functions, which is another term that the Minister introduced but has not been properly defined. They deliver social housing, for example. They do so in partnership with local authorities, often managing the social housing that is owned by local authorities. Will they be in scope of the Bill or not?

[Baroness Neville-Rolfe (Con)]

The answer I must give in the short term is that it depends a lot on the courts. I will look at housing associations; I know they have come up in other Bills that we have discussed, including how they are treated in government finance. The point about using the Human Rights Act definition is that you get a 25-year history of interpretation.

[Baroness Randerson (LD)]

My Lords, the Minister referred to the issues of public funding associated with universities and the national debt, and how that is counted. She said that these were marginal amounts of money. The UK university sector is worth £130 billion a year to the economy and employs three-quarters of a million people. Is that truly the definition of marginal? I declare an interest as chancellor of Cardiff University. Secondly, when we are looking at cultural organisations, does lottery money count as public or private money?

[Baroness Neville-Rolfe (Con)]

The honest answer is that I do not know about the lottery, but I will find out for the noble Baroness and write to her. On universities, of course she is right: very substantial sums of money, rightly, are involved in the education of our children. What I was explaining was that, at the margin of this activity—involving procurement and investment—the sum is relatively small compared with all that is done by universities.

[Lord Stevens of Birmingham (CB)]

May I offer a constructive suggestion on the clarity that might be adduced between now and further stages? Picking up on the question of the noble Baroness, Lady Blackstone, as I understand it, in 2003 the first case before the court to answer the question was Poplar housing association, where it was deemed that Poplar was a functional public authority under the Human Rights Act. That takes us to the useful report that was referred to by the noble Baroness, Lady Noakes, from the Lords and Commons Joint Committee on Human Rights back in 2003-04, entitled The Meaning of Public Authority under the Human Rights Act, which gets to the very matter we have been discussing. Obviously, jurisprudence has developed substantially since then. If the Minister could set out in writing how the Government regard the situation as having evolved since this very clear statement of the answer to the question we are struggling with this afternoon, that would perhaps nail the matter.

[Lord Boateng (Lab)]

The Minister has been enormously forbearing and we are very grateful for that. I wonder whether she could help us in this regard in relation to cultural bodies—here I must declare an interest, as an independent non-executive director of the Royal Philharmonic Orchestra. What would be the position of an orchestra that received some funding—by no means the majority of its funding—from the Arts Council, and which determined that, in the aftermath of an invasion of a sovereign nation by another sovereign nation, it no longer wanted to perform supportively of, say, the Bolshoi Ballet? What would be the position of such an orchestra, or of a board, that made that decision because it saw a real reputational risk, in the aftermath of the invasion of a sovereign country, of appearing in support of the national ballet company of the invading nation?

[Baroness Neville-Rolfe (Con)]

I understand the question. Of course, we now have government sanctions against Russia, so the question is wider. The suggestion made by the noble Lord, Lord Stevens, is a good one, which would perhaps help us to move forward. I have already said that I will look carefully at the questions raised by the noble Baroness, Lady Chapman. The example of the noble Lord, Lord Boateng, is of a slightly different kind, asking rather the same question. Perhaps I can come back on that at the same time.

[Lord Hain (Lab)]

May I also ask a question? I am very grateful to the Minister, who has indeed been generous in responding, even if she has been unable to offer the Committee further clarification. Virtually all training in this country is privately provided, by private organisations, but publicly funded. Where do they fit into all this? They receive public money—from the DWP, say. I remember, as the former Secretary of State, visiting a lot of private providers. Where do they fit in? Do they come under the contractual relationship to which the Minister referred, or are they caught by the Bill?

[Baroness Neville-Rolfe (Con)]

It depends, and it also depends on case law under the Human Rights Act, which I have undertaken to look at and come back to noble Lords.

[Lord Wallace of Saltaire (LD)]

My Lords, I cannot resist suggesting that one definition of a “public function” is somewhere you are served warm white wine and canapés. That is a suggestion of how loose some of these terms can be.

The concern that a lot of us have about the Bill is that we are not entirely confident that the Government have thought through its full implications. The manifesto commitment was specific to boycotts against Israel and was concerned particularly with local authorities and universities. But we have a Bill here with a much wider set of definitions and a universal set of foreign states to which it applies, which raises a much larger number of questions. We also have a whole succession of loose definitions, which the DLUHC memorandum to the Delegated Powers Committee says, in effect, that we should not worry too much about, as we will do this all with regulations. I hope that the noble Lord, Lord Hodgson, would think that it is not necessarily always a good idea to leave everything to regulations. We are asking for greater clarity, certainty and, above all, precision, and a more limited potential scope for the Bill.

The ball is in the Government’s court, and I very much hope that this will be one of those occasions in which, between Committee and Report, the Government will come up with amendments which respond to comments that have been made constructively by us. The Minister will recall a government Bill in the previous Session for which the Government produced 340 amendments between one stage and another. We are not asking for quite that many here; we are just asking for some that begin to provide much greater precision. On that basis, I will happily withdraw my amendment, and look forward to some constructive discussions between Committee and Report.

[Baroness Neville-Rolfe (Con)]

Before the noble Lord sits down, I will repeat the point that the Bill applies only to investment and procurement decisions, as everyone understands. We are trying to find a way forward on a manifesto commitment to ban public bodies from imposing their own direct or indirect boycotts or disinvestment or sanction campaigns against foreign countries. Obviously, we need to discuss a little further how we deal with that, but I reiterate the point that I made about the use of the Human Rights Act, because we are trying to be helpful by calling on existing case law. The concern that I had about the amendments we are discussing today is that they might extend the Bill in a way that was not exactly where the Committee seemed to be coming from. I look forward to further discussions on this key matter.

Amendment 10 withdrawn.

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[Lord Stevens of Birmingham (CB)]

I take the point that the noble Baroness, Lady Blackstone, just made in respect of schools, but I also agree with the point the noble Baroness, Lady Noakes, made about the jurisprudence that has arisen, which has clarified this for a number of institutions, including, I think the right reverend Prelate the Bishop of Manchester will find, the Church of England. In fact, I believe the first case to test whether a body in the Church was indeed a public authority was Aston Cantlow Parochial Church Council, which was trying to exact a chancel repair charge. In the Appellate Committee of the House of Lords at the time, the noble and learned Lord, Lord Hope, deemed that the parochial council was not a public authority. Many details have been laid out by the courts quite clearly over the years, but if the Government could adduce that on to a single sheet of paper in the way that has been described, it would be very helpful.

[Baroness Neville-Rolfe (Con)]

My Lords, as I set out in my response to the previous group, the Government chose to apply the ban to public authorities as defined by Section 6 of the Human Rights Act 1998. It is a great advantage that your Lordships, perhaps in contrast to the other place, scrutinise Bills in this way. I cannot accept that it is a sloppy Bill—it is a good Bill—but I think that concerns have been overstated. My noble friend Lady Noakes just explained why, very eloquently. We need clarity. Most bodies know whether or not they are covered.

There is another good reason for using the Human Rights Act definition—obviously, I am happy to look further at its implications, as I have said—which is that the Government intended to apply the Bill to a broad range of bodies when they are exercising public functions. This was to ensure a consistent approach to foreign policy across the UK’s public institutions, to stop public bodies legitimising divisive campaigns, which can undermine community cohesion, and to allow public bodies to focus on their core purpose when engaging in procurement and investment. That was the intention of the manifesto commitment that I mentioned in the previous group.

These amendments seek, rightly, to probe the scope of the Bill’s definition of public authorities, but they also probe the need for the power to make exceptions to the ban. I will try to address each in turn.

I am very glad that the right reverend Prelate the Bishop of Manchester has joined the debate. The Church of England would be in the Bill’s scope only to the extent that it exercises public functions. We have heard a little about the interpretation of that in the courts.

Before I address the specific amendments, I remind the Committee that the Bill will not create any new criminal offences. That is a very important point. I also take this opportunity to address the point raised by the noble Lord, Lord Boateng, and the noble Baroness, Lady Chapman, which was picked up by my noble friend Lord Deben, on orchestras. Orchestras are very unlikely to be regarded as public authorities. Moreover, withdrawing from an event is unlikely to be regarded as a procurement decision for the purposes of our Bill. The definition of a procurement decision does not include contracts where it is the public authority providing the service.

I can also reassure the noble Baroness who raised the issue that defence contracts are also exempt from the Bill. In addition, for contracts in scope, the Bill already contains an exception to the ban for national security considerations. In practice, if a case is reported to an enforcement authority it will look at whether the public authority had regard to any of the exemptions to the Bill—for example, the national security exemptions —during the decision-making process. Evidence of this might include if the public authority shows that it was following guidance from the UK Government, or became aware, for example, that a supplier was engaged in espionage.

Amendments 26 and 23 probe whether charitable organisations would come under the Bill’s scope. Charities would be captured by the ban only if they were performing public functions. It is the Government’s understanding that most charities will not be covered by the Bill. I hope that provides reassurance to noble Lords.

[Lord Collins of Highbury (Lab)]

I am sorry to interrupt, but I was just checking the relevant parts of the Bill relating to enforcement. The Minister said that no new criminal actions arise from the Bill. What we do have is the ability of the Secretary of State to have enforcement powers that include monetary penalties. If people refuse to pay the monetary penalties, what would that result in?

[Baroness Neville-Rolfe (Con)]

Perhaps I might continue on the points raised in the debate and come back to that point. It is a very reasonable question but I am not going to answer it without advice. However, there are no criminal sanctions in this Bill, which there often are in the Bills we consider in this House.

There may be a small number of cases where charities are delivering public functions; they would therefore be captured in respect of those functions. However, it is important to note that it does not mean that a charity is a public authority just because it is in receipt of public funding.

The Bill will not apply to charities’ private functions. For example, for universities, decisions that are part and parcel of delivering higher education would be public functions so they would be in scope of the ban. If a charity did have public functions in scope of the ban, it would apply only to investment and procurement decisions made within the public functions. That is a point that I need to emphasise. Therefore, the ban would not restrict how such bodies decide, for example, to distribute humanitarian aid, which was the subject of the earlier debate.

[Lord Boateng (Lab)]

I think the Minister, or those who advise her, has misunderstood the point I raised in relation to the orchestra. The orchestra is putting on a concert version of “The Rite of Spring” as part of a Stravinsky festival. That festival is being held in a number of cities throughout the world. It is booked to appear at the new opera house in Dubai. It puts out a tender for ballet companies to provide the dance section of “The Rite of Spring” for this concert version. It specifically precludes in its procurement—so perhaps those who advise the Minister can reflect on this—the national ballet company of a country that has recently invaded a sovereign nation because it does not wish reputationally to be linked with that national ballet company. That is quite clearly a procurement. Is the Minister saying that that would not be covered by the Act and that the fact that the orchestra concerned receives a proportion of its funding from the public purse does not make it fall within the ambit of the Act? It is to that question specifically that an answer would be helpful. If she cannot give that answer, it demonstrates very clearly the concern about ambiguity that all contributors to this debate have articulated.

[Lord Boateng (Lab)]

That is what we want an answer to: is it a public authority for that purpose because it receives public funding?

[Baroness Neville-Rolfe (Con)]

I am glad that we have focused on an individual example because, in my experience, this always helps us to clarify our own thinking. I think that, if the noble Lord, Lord Boateng, will allow me, I will take the orchestra example away, along with the example given by the noble Baroness, Lady Chapman, work out the right approach and get back to noble Lords, perhaps in discussions outside the Chamber.

We all want the same thing: to make sure that the Bill applies to the right bodies in the right way. That is what we are seeking to do, which is why we started with human rights legislation, which is often a popular start, for good reasons, to legislation. However, we have, as we do, scrutinised the detail of legislation today and have come up with some extremely good questions. It behoves us to go away. I am sure we can find good answers and use them to improve the Bill, which is, as I said when I introduced the Bill, what we are determined to do to get a good Bill that leaves this House in the right place and delivers on our manifesto commitment.

I turn now to Amendment 25, which seeks to probe whether a national governing body of sport that is in receipt of public funding would be in scope of the Bill. It raises some of the same questions and issues that we are going to consider. It is possible that a governing body of sport could be in scope of the Bill. If a sporting body is considered to be a public body under the Human Rights Act, on the basis that it exercises some public functions, the ban would apply only to the public functions exercised by that body, but a sporting body being in receipt of public funding would not in itself be enough for it to be considered a public authority. These bodies play a significant public role.

[Baroness Chapman of Darlington (Lab)]

We have got the public function thing again, which the Minister has referred to frequently. She has clarified that public funding is part of what will determine whether the sporting governing body is a public body, but she said that would be relevant only in the conduct of public functions. I am not clear on this, given that at the end of the previous group we were promised a response on what a public function is. I think the Minister said that she would follow up in writing, but she is relying on that term frequently in her response to this group of amendments, which I do not think is helpful, unless she can say something at this stage about what she considers a public function to be.

[Baroness Neville-Rolfe (Con)]

The noble Baroness is right that we need to use the term “public function” with care and to be entirely clear what it means, but the receipt of public funding is another legitimate issue that we need to understand—and understand the scale as well.

[Baroness Chapman of Darlington (Lab)]

As an example, if a young people’s badminton team were to be taking a tour of south-east Asia and felt it did not want to take part in events in certain regions of China and came under some pressure on this from parents or other groups, how would that be? You could say that enabling young people to engage in sport is perhaps a public function. I do not know. How would that be considered?

[Baroness Neville-Rolfe (Con)]

That example would not be procurement or investment, so it would be outside the scope of the Bill. However, the noble Baroness has raised the point. Sporting bodies can be within scope, as I explained, in procurement and investment decisions. The reason for this is that these bodies play a significant role in public life and it would send a very unhelpful signal if we were to single out governing bodies of sport as an exception to the Bill.

[Baroness Chapman of Darlington (Lab)]

I am sorry to keep on about this, but there is then a need to define procurement. In the example that I am, perhaps tenuously, relying on, there would surely be procurement of transport services, accommodation services, catering services and venues.

[Baroness Neville-Rolfe (Con)]

It seems to me that the issue here is boycotting a sporting event, and that is not a procurement or investment decision—but I have already undertaken to look carefully at these individual examples, because we all want to understand exactly what we are talking about and to come to the right outcome.

Amendment 24 would carve out community interest companies. While it is not inconceivable that a community interest company might perform a public function, neither the purpose nor the structure of a community interest company naturally lends itself to that. It is not, by and large, what the Bill is designed for.

Amendment 22 seeks to probe whether schools and early years providers, such as nurseries, are in scope of the Bill. I can confirm that all publicly funded schools will be captured by the ban when they are performing public functions, and some early years providers will also be public authorities on that definition. Other early years providers may be captured to the extent that they are performing a public function. However, I will take noble Lords’ concerns on that issue away, because I think it comes into the same category as the other two examples we will be looking at.

Privately funded independent schools—and I think this will probably apply to private universities—will be captured to the extent that they perform a public function. However, they are unlikely to perform functions of a public nature in scenarios where they are captured as hybrid public authorities, which we discussed on the previous group. The ban will ensure that publicly funded schools remain shared spaces for all, and the Bill will ensure that schools and early years providers can remain focused on their core duties, rather than being distracted by divisive campaigns promoted by BDS and others.

[Lord Deben (Con)]

If a Church of England or Catholic school says it will not buy from a country that is persecuting Christians, that is concentrating on its core responsibility. It is not avoiding it; it is what it is there for, which is to uphold the faith. Are we really going to dictate whether or not it should make that decision?

[Lord Roborough (Con)]

My Lords, the Minister has an advisory speaking time of 20 minutes. May I respectfully suggest that we leave any further interventions until the end to allow the Minister to answer as many of the existing questions as possible?

[Baroness Neville-Rolfe (Con)]

I have already said that I am trying to answer the many questions noble Lords have asked. There have been a great many interventions on me and I have been very patient. I have also made some undertakings to try to clarify some of these points, including childcare, which would cover the schools that my noble friend Lord Deben mentioned.

Perhaps I could turn to Amendment 54, which requires

“the Secretary of State to provide a comprehensive list”,

of the bodies in scope

“before the provisions in Clause 1 can be brought into force”.

The Government are not able to provide a comprehensive list of bodies captured by the Human Rights Act definition. However, I have tried to be clear on the categories of bodies that includes. To repeat, these include: central government agencies and non-departmental public bodies; UK Government Ministers and devolved Ministers; local authorities; administering authorities of local government pension schemes; universities and higher education providers with public functions; publicly funded schools; and some museums and galleries in receipt of significant public funding.

As with any definition, there will be further cases at the margins where it is impossible to generalise without the full facts of a case. That, of course, is where the courts come in. Legislation often uses general definitions—for example, the Human Rights Act from which we have taken the scope or the scope of bodies covered by obligations under public procurement legislation.

Finally, I turn to Amendment 14A. This would remove from the Bill the powers granted to the Secretary of State to amend the schedule to make exceptions to the ban for certain bodies, functions and types of considerations, and to amend or remove regulations made under these powers. I understand concerns about the use of subordinate legislation—the noble Lord knows that—and we are lucky that we have such a good committee to supervise its use. However, these powers are necessary to ensure that the ban can evolve over time and operate as intended, for example in response to emerging global events.

I assure the noble Baroness, Lady Chapman, that the FCDO is fully supportive of this legislation, and all regulations made under this Bill would follow the normal procedure of cross-governmental clearance and, of course, be approved by the Foreign Secretary. In the event that in future the ban has unintended consequences for a certain public authority, it is right for the Secretary of State to have the power to exempt that body, or a function of the body, from the ban via statutory instrument—I think today’s debate shows that that is necessary—and this would be subject to affirmative resolution by both Houses.

These powers will also allow the Secretary of State to exempt certain types of considerations from the ban. For example, Ministers may decide to exempt a narrow type of consideration to ensure the ban can evolve in line with government policy. The powers future-proof the legislation to ensure the ban can continue to operate effectively and mitigate against any unforeseen circumstances.

Before I close, I should perhaps address the point made by the noble Lord, Lord Deben, on the environment. The ban applies only to decisions that target a particular country or territory. For example, environmental campaigns, including ones against fossil fuels that are not country specific, are outside the scope of this Bill. I also reassure my noble friend that the power in Clause 3 cannot be used to remove any exception to the ban in the Bill as passed by Parliament. There is a schedule the noble Lord can look at, which includes environmental misconduct, which we are coming on to discuss.

I hope, finally, to address the point raised by the noble Lord, Lord Davies of Brixton, with regard to why there is a separate clause in the Bill for local government pension schemes. The administering authorities for local government pension schemes are public authorities under Section 6 of the Human Rights Act. Capturing administering authorities of LGPS in a bespoke provision means that the Pensions Regulator can use its existing powers and procedures to enforce the BDS ban for the administering authorities of LGPS. That avoids the Pensions Regulator setting up a separate enforcement system for the Bill. I am happy to have a discussion with him; we often discuss pensions issues which are of limited interest sometimes to the whole House.

I hope that my response to this group of amendments —importantly, alongside the undertakings I gave in response to my previous group which we expanded a little to bring in telling examples—will help the Committee to understand why we have chosen the Human Rights Act definition and I ask the noble Lord to withdraw his amendment. I look forward to further discussion.

[Lord Collins of Highbury (Lab)]

I hope I am able to intervene at this point before the noble Baroness sits down—some of these new rules that have been introduced for Committee stage I find incredibly damaging to our ability to properly scrutinise this Bill; I raised that point at the committee.

The noble Baroness said that the FCDO fully supports this legislation. She may recall that, at the previous Committee day, I specifically raised this question because I wanted to inform the Committee of the precise nature of the FCDO’s advice following United Nations resolutions regarding the Occupied Territories, which are specifically mentioned in this Bill. Perhaps she can take this opportunity to tell us how that advice could potentially impact the sort of investment and procurement decisions that organisations might make. There is advice issued by the FCDO in relation to the Occupied Territories.

[Baroness Neville-Rolfe (Con)]

We are going to be discussing the Occupied Territories in a group two or three later in this Bill and I do not have an answer to the noble Lord on this point today, except to reiterate that this Bill has been collectively agreed. I was particularly talking about the arrangements for regulations which, in turn, had been collectively agreed. I explained the system that when you have a new statutory instrument, there is a write-round which involves all relevant Ministers. In this particular case, that would certainly include the Foreign Secretary.

[Lord Warner (CB)]

Before the noble Baroness sits down, can I ask her to take away the point I was ineptly trying to raise earlier? If a public body—we could take as examples housing, health and care—has an investment decision to make on a new building and/or new services, is it expected to find out more about the sources of the money going to be used to enable it to perform public functions and provide new public buildings? Are they expected to go that far?

[Baroness Neville-Rolfe (Con)]

I am grateful for that point, but I am not sure I entirely understand it, so perhaps I can offer to meet the noble Lord or to write to him and make sure that he gets an answer in good time.

[Baroness Chapman of Darlington (Lab)]

My Lords, I was not expecting this group to elicit quite the debate it did, but it was incredibly helpful and welcome in exposing what the noble Lord, Lord Warner, called “sloppy”. He makes a fair point. The Minister said that she did not like that phrase but, given that we have been unable to agree a definition of a “public function”, unable to elicit a proper definition of “procurement” and have not agreed what a “public body” is by any means, I have to agree with him.

This is not us being mendacious or deliberately creating problems for the Government, although you could argue that is a fair thing for the Opposition to want to do; that is not what we are doing here. Like the noble Lords, Lord Willetts and Lord Deben, we are trying to get to the real nub of how this Bill enables the Government to fulfil the commitments that we all accept they made in their manifesto. We understand that the Government want to stand by those commitments, but we are so concerned that the legislation before us could end up straying into so many more areas. I honestly do not think that when this went into the manifesto, anybody had sporting bodies or schools in mind, yet here we are with the Minister unable to answer some quite straightforward examples, including a very good one from my noble friend Lord Boateng. I regret that.

I agree with my noble friend Lord Collins that, when the Government Whip pops up to try and rescue the Minister from having to take too many more interventions, that is fair enough, those are now the rules, but this place is supposed to be able to spend a bit more time in Committee—

[Baroness Neville-Rolfe (Con)]

I think that is a little unfair. The noble Baroness knows that I am always ready to take interventions and have continued to do so. I am doing my best to do the job that this Chamber does so well. We have used the Human Rights Act definitions and this Chamber has decided that that causes problems. I am sure those are soluble.

Economic Activity of Public Bodies (Overseas Matters) Bill

Baroness Neville-Rolfe Excerpts

Wednesday 17th April 2024 Lords Chamber

[Baroness Chapman of Darlington (Lab)]

My Lords, I will be very brief. I do not want to repeat some of the excellent points made, but I do have an amendment in this group about requiring a legislative consent Motion. For us, this is primarily an issue of respect. It saddens us: from the internal market Act, relationships between the UK Government and the devolved Governments started to go really badly wrong. It seems to happen again and again. I remember a couple of weeks ago, in this Chamber, the noble Lord, Lord Moylan, referred to the Welsh Government’s desire to work to support the Welsh language as a fascist attitude. That has played on my mind ever since. Things have really deteriorated to such an extent that, in the personal relationships between politicians in the UK Government and the devolved Governments, which politicians used to take pride in putting some effort and work into, nobody seems to even try anymore. Bills such as this one come along where the Government do not seem to care whether it has any legislative consent and do not even try to persuade their colleagues in the devolved Administrations to see the benefits of a particular piece of legislation. That is very sad. I regret that deeply, and the Government really ought to do better.

This is primarily about freedom of expression for people who have been elected in their own right to represent their communities. It is wrong that Clause 4 prohibits statements. We will come on to that later, but they are to be gagged by the Bill, and that is to be regretted. It is a backwards step. We will debate that another day. I hope that noble Lords will understand just how offensive the restrictions in that clause are to elected Governments in Scotland, Wales and Northern Ireland.

As others have said, the Bill is disproportionate and unnecessary. The Minister and I have had exchanges about things raised by the noble Lord, Lord Foulkes, about the Scottish Government having offices in other nations, and he says that this is wrong because foreign policy is the UK Government’s domain, He is right about that—he does not speak for the Labour Party on these issues and is not right in the complete sense on the points that he makes on this. The Government agree and say that this is a terrible problem, that it is confusing for our partners overseas and that something should be done, but they are doing nothing about it. Instead, they feel that this is causing confusion in foreign policy. I just do not believe it. I do not believe that any other Government anywhere in the world is confused about our foreign policy because of some statement that the noble Baroness, Lady Noakes, says has been put in a drawer somewhere in Edinburgh, was passed 10 years ago, and is somehow causing such diplomatic confusion. I do not see any evidence of that whatsoever.

It is sad that the Government no longer even try to pretend that they want to work in partnership with devolved Governments. We can do so much better. The UK Government already have sanctions powers, and they are now seeking unnecessarily to fetter and gag devolved Governments. This shows a terrible lack of respect and I regret it very much.

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

My Lords, the amendments put forward by the noble Baronesses, Lady Bryan of Partick and Lady Chapman of Darlington, and the noble Lord, Lord Hain, seek to remove Wales, Scotland and Northern Ireland from the territorial application of this Bill. I am sorry that the noble Baroness, Lady Ritchie, and the noble and learned Lord, Lord Thomas, are not here tonight, as they usually are in these discussions.

I disagree with these amendments for two reasons. First, the intention of this Bill is to ensure that the UK speaks with one voice internationally. It will safeguard the integrity and singularity of the UK’s established foreign policy, which is set exclusively for the whole of the United Kingdom by the UK Government. My noble friend Lady Noakes explained that well—political and moral disapproval is the issue here—and she gave a Scottish example. The noble Lord, Lord Wallace, takes a different view.

I see it this way: international relations and foreign policy are reserved matters and remain the responsibility of the UK Government and the UK Parliament. Removing Scotland, Wales and Northern Ireland would be out of line with the devolution settlement and undermine one of the main aims of the Bill—one UK foreign policy decided by the UK Government. I appreciate the view of the noble Lord, Lord Hain, that decisions should be made as close to local level as possible. However, I do not believe that this would be appropriate for international relations, which is rightly reserved for the UK Government. The UK cannot effectively conduct a single foreign policy if each devolved Administration or indeed local authorities, as I think we were talking about, are conducting a separate policy.

The second reason I oppose these amendments is that the BDS campaigns, which risk undermining community cohesion, are a UK-wide problem. I will illustrate this briefly with some examples. In Wales, a 2014 motion passed by Gwynedd Council called for a trade embargo with Israel. In 2020, as the noble Baroness, Lady Noakes, pointed out, the Welsh Government informed the Welsh Parliament that they intended to issue advice to all Welsh public authorities that they may exclude from tendering any company that conducts business with the Occupied Territories, whether directly or via third parties. Only after intervention from UK Lawyers for Israel did the Welsh Government defer this decision.

In Scotland, in January 2009, West Dunbartonshire Council passed a motion agreeing to boycott all Israeli goods. That motion was reaffirmed in June 2010 and May 2011. In December 2010, Stirling Council passed a motion resolving to

“reassess its current procurement arrangements and ensure future agreements and contracts boycott all Israeli goods”.

In March 2013, Clackmannanshire Council passed a motion to

“resist, insofar as legislative considerations permit, any action that gives political or economic support to the State of Israel”.

In Northern Ireland in 2016, Derry and Strabane Council voted in favour of BDS. A motion was passed to investigate the most practical means of implementing the BDS campaign in the council. Finally, in Belfast in 2019, councillors attempted to bring forward a resolution to support BDS.

For these reasons—the need for a single UK foreign policy and the record of boycott campaigns across the UK—it is vital that the Bill’s provisions extend to each of the jurisdictions of the UK. This includes all public authorities, as defined in Section 6 of the Human Rights Act 1998. This includes Ministers in the Devolved Administrations. This may alter their executive competence, so the legislative consent process has been engaged, as the noble Baroness, Lady Chapman, explained. We have therefore sought legislative consent from the devolved legislatures to apply the bans in Clauses 1 and 4 to Ministers in Scotland, Wales and Northern Ireland.

International relations and foreign policy are reserved matters and remain the responsibility of the UK Government and the UK Parliament. The Bill legislates in this area.

The noble Baroness, Lady Bryan of Partick, emphasised that the devolved Administrations are required to act within the European Convention on Human Rights. The Bill will not compel public authorities to make a decision that would put them in breach of the convention, and it will not interfere with the rights of any public authority. One of the reasons why we chose the public authorities definition is that these bodies do not have convention rights, so the Bill is compliant with the convention, including the Article 10 right to freedom of expression.

In response to the noble Baroness, Lady Randerson, I would like to reassure her that the powers in the Bill can be used only to narrow the scope of the ban, as it would be set in primary legislation. They cannot be used to place broader obligations on the devolved Administrations than what was agreed by Parliament.

[Lord Warner (CB)]

I am sorry to interrupt the Minister, but I am still trying to puzzle out what happens, to take the example of Scotland, if there is a great deal of resentment about this legislation, particularly Clause 4. What happens if the Scottish Parliament, presumably protected by privilege, decides to have a debate, there are a number of decision-makers under Clause 1 in that debate, and they voice their view in a way that is totally different from the Government’s view on that particular country and the issue they are debating? Would the UK Government then wind itself up to fine them? I am not quite sure what the fine levels will be. What if the Scottish Parliament then has another debate and decides not to pay the fine? This does not seem a fanciful position, given that the Government seem to be going out of their way to annoy the devolved Administrations. What will the Government actually then do, in practice?

[Baroness Neville-Rolfe (Con)]

If I may, I will come back to that at the end of the speech, because I want first to try to explain what we are doing with the devolved Administrations. The noble Baroness, Lady Randerson, said that the WTO already places non-discrimination requirements on public authorities. Although this is the case, these obligations do not cover all countries and territories and apply only to procurement decisions, not investment decisions.

To return to the subject of legislative consent, I think it is fair to say that we are disappointed that the Senedd and the Scottish Parliament have refused to give their consent to apply the ban to their Ministers and the respective departments and agencies. It is always the Government’s intention to legislate with the support of the devolved Administrations and, where relevant, the consent of the devolved legislatures. We will therefore continue to ensure that the interests of the devolved Administrations, including the devolved assemblies, are fully taken into account. Contrary to the noble Baroness’s suggestion, we do engage with the devolved Governments. I was in Northern Ireland last week, I visited the Welsh Government relatively recently, and my office has contacted the offices of the relevant Ministers in the Scottish and Welsh Governments. I hope to meet with them in the coming weeks to discuss further how we can gain their support for the Bill.

[Lord Hain (Lab)]

I will be brief, given the hour. What advice would the Minister give to Welsh local authorities if they refuse to procure or encourage any local companies to do business with Xinjiang province in China because of its oppression of the Uighur Muslims? China, unlike Russia and Belarus, is not listed in the Bill in that way.

--- Later in debate ---

[Baroness Neville-Rolfe (Con)]

I am not quite sure what will happen about Xinjiang; that is a foreign affairs question. Obviously, although it is not referred to in the Bill, we have made it clear that we will use the Bill, where appropriate, to exempt areas. We have already said we will use the powers in relation to Russia and Belarus. I am going to talk to the Welsh Government, and I am sure this is a question that will come up. As I said, I hope to meet them in the coming weeks to discuss further how we can gain support for the Bill and what would be the right approach.

In Northern Ireland we have been formally seeking consent from the Northern Ireland Assembly since the restoration of power sharing and will continue to do so. The noble Baroness, Lady Bryan, asked for reassurances that we have engaged with the Northern Ireland Executive. Officials have discussed the Bill’s provisions with officials in Northern Ireland and have been actively pursuing engagement with the Northern Ireland Executive now that power sharing has been restored. I hope to be able to meet Ministers in the Executive to seek their consent for the Bill soon.

In response to the concerns expressed by the noble Lord, Lord Warner, about what would happen if a public authority does not pay a penalty, we would advise public authorities to reconsider before refusing to pay a fine as the enforcement process, which I think we will come on to discuss on subsequent days, makes it clear that it could end up being enforced by the respective court system of the devolved area. The enforcement authority can apply to the court for the enforcement of an information notice. A failure to pay a fine is a civil debt, to answer the point that was made in an earlier group by the noble Lord, Lord Collins, under Clause 10(3). This will be through the courts in the relevant devolved jurisdiction, so if a Scottish council was subject to an information notice or issued with a fine, that would be enforced by the Scottish courts.

I am conscious it is late. We have had a lively conversation on this subject. I hope that for the reasons I have set out the noble Baroness will be willing to withdraw her amendment.

[Baroness Bryan of Partick (Lab)]

I thank the Minister for her response and everybody who has participated in this discussion. The Minister and the noble Baroness, Lady Noakes, believe that there should be one voice in all international policy, but procurement is a devolved issue and, as we have heard, Clauses 1 to 4 require legislative consent. The worry is they require it, so they can ignore it, but I hope not.

The noble Lord, Lord Hain, put his finger on the issue of subsidiarity versus centralisation. Are we going to have one centralised procurement body for the whole of the UK that will choose which procurement is in line with the Government of the day’s international policy? I do not think anybody wants to go down that route. There is strong concern about the backpedalling, as it was described, and the resentment that this will cause. Remember that 50%-plus of voters support independence in Scotland. They might not be ready to vote for it at this time, but give them a push further along, and we might find that that happens. More Welsh voters are coming to support independence, and Northern Ireland is being held together by constant vigilance. I hope that the concerns raised here are taken seriously and that the Government engage properly with the devolved Administrations, discuss their trade plans with them and do not treat them as a minor inconvenience that gets in the way of the big issues of government. I beg leave to withdraw the amendment.