Procurement Bill [HL]

Baroness Noakes Excerpts

Committee stage
Monday 18th July 2022 Grand Committee

Moved by

[Baroness Noakes]

96: Clause 18, page 12, line 22, leave out “must” and insert “may”
Member’s explanatory statement
This amendment probes why suppliers which do not satisfy conditions of participation must be excluded from a contract award under clause 18 though such suppliers are not required to be excluded from the tendering process under clause 21(6).

[Baroness Noakes (Con)]

My Lords, I shall speak also to Amendment 107 in this group. The large part of this group is government amendments, but my two small probing amendments have found their way into my noble friend’s rather large group.

Amendment 96 is another “may/must” amendment, which we always enjoy in this Committee. It probes the effect of not satisfying participation conditions on a tender. Clause 21 allows a contracting authority to set conditions of participation in specific areas. Subsection (6) permits but does not require the contracting authority to exclude a supplier which does not satisfy a participation condition from then participating in all or part of the tendering process.

If a contracting authority does not exclude a supplier from the tender process, one might think that such a tender could result in the award of a contract. If that were not the case, I can see no reasonable case for allowing such a tender into the process at all. However, subsection (3)(a) of Clause 18, which deals with contract award, states that

“a contracting authority … must disregard any tender from a supplier that does not satisfy the conditions of participation”.

Hence, we seem to have an Alice in Wonderland world where a supplier which has fallen foul of participation provisions can take part in the tender process, but only on the strict understanding that it cannot win the contract. That does not make any sense to me. My amendment would make the terms of Clause 18 permissive, so that a contract could be awarded. Another solution would be to make exclusion mandatory from the tender as well as from the contract award.

My second amendment in this group, Amendment 107, is a simple probing amendment to ascertain what is meant by Clause 19(3), which deals with competitive tendering procedures. Subsection (3) requires the procedure to be proportionate,

“having regard to the nature, complexity and cost of the contract”,

which seems at first sight entirely sensible and should stop contracting authorities using unnecessarily burdensome procedures. What subsection (3) does not say, however, is how this is to be assessed.

In a rare case of going beyond what is in the Bill, the Explanatory Notes say:

“Subsection (3) requires contracting authorities to ensure that the procedure is not designed in a manner that is unnecessarily complex or burdensome for suppliers”.


This is, in fact, from paragraph 141 of the Explanatory Notes, not paragraph 142 as I set out in my explanatory statement. The Explanatory Notes therefore firmly place the consideration of proportionality in the context of suppliers, but that has not found its way into the text of Clause 19, and that is what my Amendment 107 seeks to change.

In addition, even if subsection (3) could be read as being a supplier-centred proportionality requirement, it does not give any help as to whether the contracting authority has to consider suppliers generally, in an objective way, or whether they should take account of the particular characteristics of likely suppliers. I have in mind in particular that what proportionality might look like to a multi-million-pound contracting business is light years away from its impact on a small or medium-sized enterprise.

I hope my noble friend will agree to make the Bill clearer in this regard, or at least make a clear statement from the Dispatch Box as to how Clause 19(3) is intended to be interpreted. I beg to move.

[Lord Scriven (LD)]

My Lords, I rise to speak to Amendment 105 in the names of my noble friends Lord Wallace of Saltaire and Lord Fox. I will come on to some of the points the noble Baroness, Lady Noakes, made, but before I start, I apologise for not being here at the start of the Committee. As my noble friend Lord Clement-Jones said, I was on a train for four hours. Actually, you can hear my croakiness: I am the healthiest one on our Front Bench today, so I am here—

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I respectfully request that these amendments be withdrawn, and I beg to move the government amendments. I apologise; I think I am still on beach head and not on Grand Committee head.

[Baroness Noakes (Con)]

My Lords, I do not think my noble friend the Minister can move her amendments yet; she will move them when they are reached in their proper place on the Marshalled List. I thank all noble Lords who have taken part in this debate and particularly for the support for my amendments in this group, for which I am grateful.

So far as Amendment 96 is concerned, I was grateful for my noble friend’s explanation, which seemed to make sense. I am content with that. I have no idea what the clarification she was reading into Hansard was about, but I do not suppose it really matters.

Where Amendment 107 is concerned, I am rather less satisfied. I think I agree with my noble friend that clarity is required. My amendment was tabled because the Explanatory Notes went further than the Bill and said that it should be from the suppliers’ perspective. But I think I heard my noble friend say that we do not want contractors challenging the procedures; well, actually, yes, we do, if they are burdensome. If we are trying to set out that the aim is, as correctly stated in the Explanatory Notes, to make sure that these are not burdensome for suppliers, we should facilitate challenge of contracting authorities and not just assume that contracting authorities have a monopoly on wisdom on what is proportionate in this regard. I am not happy with that response today, but we are agreed on clarity, so perhaps we can achieve a route to clarity between now and Report. I beg leave to withdraw the amendment.

Amendment 96 withdrawn.

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[Lord Alton of Liverpool (CB)]

My Lords, it is a great pleasure to follow my noble friend Lady Boycott and to associate myself with the remarks she has just made, and also with the noble Lord, Lord Hain, who made an important contribution to the proceedings of the Committee this afternoon. We will all be interested to hear how his meeting with the right honourable Jacob Rees-Mogg goes on Wednesday.

I shall speak to Amendments 331 and 353. Amendment 331 in the name of the noble Baroness, Lady Hayman, and the noble Lords, Lord Coaker, Lord Bethell and Lord Fox, deals with serious human rights abuses. When the Minister responds I hope he will bear in mind the very helpful conversations he and I had when he agreed to meet me to discuss modern-day slavery and genocide. I should mention that I am a trustee of the anti-modern-day-slavery charity the Arise Foundation and a patron of Coalition for Genocide Response.

It concerns me that the word “genocide” has been put in a list that simply states that

“‘serious human rights abuses’ includes, but is not limited to”,

and then sets out a list from (a) to (f). It is not that any of these things are minor questions. Winston Churchill said that the horrors committed during the Nazi regime constituted a crime that had no name. It took Raphael Lemkin, the Jewish Polish lawyer, to create the name “genocide” to describe what had been done. Indeed, the 1948 convention on the crime of genocide came from that. Your Lordships will recall that the amendments to earlier legislation I moved specifically on the procurement of technology via Huawei and later on the Health and Care Bill, which the noble Baroness, Lady Stroud, referred to, were careful to set aside the word “genocide” from other questions.

I have one specific and, I hope, helpful remark to make to the noble Baroness and others, which is that if this amendment is to be pursued later, perhaps these questions can be separated, because there are many people who would be willing to vote on genocide not only in your Lordships’ House but in another place but who would not be willing to support something that was simply a list of serious human rights violations. I think that some further thought should be given to that.

On Amendment 353 on supply chain resilience against economic coercion and slavery, I shall try to be brief because I set out some of the arguments about this in our earlier debate about Hikvision and the role that companies such as that have played throughout procurement processes. They are surely what the Bill is dealing with, yet they operate with impunity from their base inside the People’s Republic of China and have been directly associated with the enormities that have been committed in Xinjiang, where it is estimated that more than 1 million Uighurs are held in concentration camps. All of us have read appalling accounts of their treatment, and anything we can do at any stage, we should try to do. I know that the noble Lord, Lord True, is sympathetic to this argument.

Therefore, let me briefly set out some of the arguments that have perhaps been put to him by officials or others who would oppose the excellent amendment in the name of the noble Baroness, Lady Stroud, which is supported by the noble Baroness, Lady Smith of Newnham, the noble Lord, Lord Coaker, and me. First, will this not have a chilling effect on government procurement? Yes, there will be a chilling effect on government procurement of slave-made goods—and so there should be. Businesses that do not rely on slavery for sourcing have absolutely nothing to fear. The amendment sets the bar low but establishes certain minimum standards. It is noteworthy that the Uyghur Forced Labor Prevention Act goes much further than this proposal—I drew it to the attention of the noble Lord, Lord True, during our discussions—and there has been no “chilling effect” documented in the USA. I will add that that legislation enjoyed significant bipartisan and bicameral support in the United States.

Secondly, will this not discourage competition and therefore crush markets? No. On the contrary, the amendment will incentivise business to raise its human rights game and encourage competition among entities which meet basic human rights standards. We should be using our purchasing power, this phenomenal amount of money, more than £300 billion, to nudge the business world. This amendment helps us to achieve that. It removes disadvantage for lawful performers, and that is something we should all welcome.

Thirdly, is this not just another anti-China amendment? No. The amendment does not even mention China. Forced labour is a global issue, whether it is exploitation in Brazilian mines or Malaysian tech factories or indeed Uighur slave labour. It is morally imperative that taxpayers’ money does not fund slavery, wherever it is and wherever it is practised.

Fourthly, does this not turn civil servants into police for business supply chains? Civil servants already assess those bidding for government contracts against certain criteria, and that is exactly how it should be. All the amendment seeks to do is to make the criteria more robust. Civil servants generally do not have the resources to inspect supply chains. As the noble Lord, Lord Coaker, probably knows better than any other noble Lord in this Committee, assessing what is going on in a supply chain is an extraordinarily complex, time-consuming and resource-ridden process. The amendment recognises that, and seeks instead to provide civil servants with more tools to ensure better anti-slavery standards around disclosure and transparency of sourcing inputs.

I wonder whether the noble Lord has had it put to him that we are presuming the guilt of businesses by blacklisting entire countries or areas. No, the amendment does not presume that a business operating in a particular area is de facto guilty of perpetrating slavery, although this is the assumption of the United States legislation, which imposes a rebuttable presumption. I admit that that is something that I personally favour, but it is not what is in the amendment. In the United States, that targets goods produced in the Uighur region because it is assumed that they are tainted.

I was struck that the noble Baroness, Lady Stroud, referred to that word when discussing earlier legislation the House passed, the Health and Care Act, which includes the word “tainted”. I think the Minister will forgive me for saying that that legislation was strengthened by civil servants from his department, who gave advice to the Department of Health. It would be absurd to have legislation that applies purely to the National Health Service, despite the fact that we spent £10 billion on PPE, but does not apply to other departments. You cannot have legislation, especially a procurement Bill, which is weaker than legislation already on the statute book. The amendment merely requires that the origins of goods and their constituent parts are disclosed.

What difference will this really make? Do we need more regulation? The Health and Care Bill was amended precisely because there was acceptance—the Government knew—that the existing regulation was not strong enough. It is to the credit of Sajid Javid that he recognised that and did something about it. The Government are widely suspected of procuring goods and services that may be tainted with slavery. In 2020, the Daily Telegraph reported that, for one contract alone, £150 million of PPE originated in factories in the Uighur region with a documented slavery problem. If stronger standards are good enough for the Department of Health and Social Care, they are surely strong enough for the whole of government, and this Bill gives us the opportunity to do something about it.

Finally, it is often said, “Not this Bill, not this time. There is a modern slavery Bill coming; why can we not just wait for that?” The amendment before your Lordships addresses government procurement and this is the Procurement Bill. It is entirely appropriate that an amendment seeking to improve certain standards regarding government procurement should be debated during the passage of this Bill. Moreover, we do not know what is likely to be in the modern slavery Bill; we were told a lot about it during the course of the Nationality and Borders Bill, which pre-empted its provisions then, but we still do not know what will be in it—and, after all, we are in the midst of a change of Government.

Engagement with the Government and this Secretary of State has been good and, as I finish, I pay tribute again to the noble Lord, Lord True, for his patience in putting up with representations constantly being made to him on this subject. But there is no guarantee that will continue. While Ministers smile on these efforts, we are keen to make the progress we can now, while Ministers such as the noble Lord are in place.

[Baroness Noakes (Con)]

My Lords, I have two small amendments in this group, Amendments 330 and 332. I must say that this group contains far too many issues to be debated effectively. My own are minor, so I did not degroup them, but I hope that in future other noble Lords will exercise their right to degroup so that we have sensible groupings to enable a proper Committee debate. I will probably get into trouble with my Chief Whip for encouraging noble Lords in this direction, because I think there is a view that large groupings are more efficient. However, I do not believe that; I believe in effective scrutiny in your Lordships’ House.

Amendment 330 probes the relationship between the mandatory exclusion of suppliers for improper behaviour in Clause 30 and the discretionary exclusion found in paragraph 14 of Schedule 7. I do not understand why the Bill has to have improper behaviour as an exclusion ground dealt with in two places. The definition of “improper behaviour” is virtually identical in each case, and they certainly seem to be aimed at the same behaviour. The processes are very similar, with rights given to suppliers in both cases, and they are both aimed at exclusion decisions. There are wording differences between the two parts of the Bill, but I cannot see anything of substance involved. It just looks as if two parliamentary draftsmen have been involved in different bits of the Bill and they have not known what was going on in the other bit.

Schedule 7 requires only that the decision-maker—which is usually the contracting authority, as in Clause 30—“considers” that there is improper behaviour, while Clause 30 requires a determination. However, in this context, I cannot believe that that is a distinction with any real difference attached to it. The main difference of substance is that Clause 30 results in mandatory exclusion, while paragraph 14 of Schedule 7 does not necessarily lead to exclusion. I hope that my noble friend the Minister can explain the subtleties of why improper behaviour has been dealt with in this way. My own view is that it would be easier to understand if Clause 30 were placed in the Schedules 6 and 7 structure of the Bill, since it deals with exclusion, and could have options of mandatory or discretionary exclusion. I certainly look forward to hearing what my noble friend the Minister has to say on that.

Amendment 332 is slightly different; it concerns paragraph 16 of Schedule 7, which itself sets out exclusions from the discretionary exclusions in Schedule 7. Under paragraph 16(4), there are four exclusions from some of the Schedule 7 things which have happened before the schedule came into force. It is my understanding that the existing procurement rules already contain three of the grounds for exclusion. So it does not seem logical that, when we shift to this new Procurement Bill, we disregard things that happened in the past that were exclusion grounds because they happened before the Act came into force—it seems to be an unnecessary discontinuity.

I believe that the new ground is “national security”, under paragraph 16(4)(d). For that, it is probably reasonable to disregard behaviour that occurred prior to the Act coming into force. I invite my noble friend the Minister to explain the logic behind paragraph 16(4).

[Baroness Smith of Newnham (LD)]

I will speak to Amendment 353, to which I am a co-signatory, and in passing to Amendment 331. Perhaps surprisingly, my first comment will be to agree with the noble Baroness, Lady Noakes. As we were listening to the various interventions and the introduction of various amendments, my sense was that we were trying to debate too many things in one group. In particular, when I listened to the noble Baroness, Lady Boycott, I thought that hers were very interesting amendments but that they were not really related to some of the issues associated with modern slavery, genocide and human rights that we were thinking about. I would also like to the irritate the Whips by suggesting that a little more degrouping might be beneficial in future.

The noble Baroness, Lady Stroud, introduced Amendment 353 in considerable detail, and my friend, the noble Lord, Lord Alton, then elaborated on it further. At this point, I do not want to go into further detail but to press the Minister on whether the Government would not see that it is appropriate to extend what the Department of Health and Social Care has done with the Health and Social Care Act to ensure that there is transparency in supply chains and that we do everything possible to ensure that genocide and modern slavery are excluded. Other noble Lords have provided the reasons why that is so important. I would hope to give the Minister plenty of time in which to respond.