Economic Activity of Public Bodies (Overseas Matters) Bill (Fourth sitting) Debate
Full Debate: Read Full DebateChris Stephens
Main Page: Chris Stephens (Scottish National Party - Glasgow South West)Department Debates - View all Chris Stephens's debates with the Ministry of Housing, Communities and Local Government
(1 year, 2 months ago)
Public Bill CommitteesI am grateful to the Minister for giving way, but there are difficulties with the drafting of the clause, and one criticism is that it seeks to apply a subjective rather than an objective test. However, will she clarify the point made by the hon. Member for Nottingham North? The disapproval of foreign state conduct, which the Bill refers to, includes disapproval by individuals and by public organisations collectively, but it would also apply to individuals in such organisations. Will the Minister therefore outline the Government’s intent, because there is some confusion about the way the Bill is drafted?
I will go on to address that, but to give the hon. Gentleman a simple answer now, if an individual is talking on behalf of a local authority, that is captured by the Bill. If a council leader makes a statement on behalf of the local authority, that is captured. If a councillor, or indeed a council leader, makes a statement but is not representing the local authority, that is not captured. The issue is whether it is “on behalf of”.
The Minister is being very generous in giving way. Let us be clear: a council leader or any councillor who is being interviewed by a journalist or on television would have to say, “This is my personal opinion. I am not speaking on behalf of the local authority,” and would have to hope that that was not edited out before the interview hit the newspapers or the television. There is a bit of difficulty around this issue. Given the Minister’s answer, I wonder whether the Government could go away and look at the clause, because I think they will find themselves in great difficulty on this issue.
Scotland has its own legislative framework under the Procurement Reform (Scotland) Act 2014, along with associated regulations and guidance. That legislative framework places duties on certain contracting authorities to demonstrate how the social, economic and environmental aims of procurement have been considered in a consistent manner, as required by the sustainable procurement duty under the Act. For example, a contracting authority is required to include a statement of its general policies on the procurement of fairly and ethically traded goods and services in its procurement strategy.
I have tabled a number of amendments in this group. Essentially, they can be summed up by this: Westminster might have the powers of reserved matters, but Scotland is a devolved nation. Scotland has its own Parliament and its own Government; it is not for Westminster to turn around and tell Scotland what she should do, because that Parliament was elected democratically by the people of Scotland. Devolved Governments, including the Scottish Government, make their own public procurement decisions. That is one manner in which they can encourage companies to behave in a way that is in line with human rights, including labour rights and environmental concerns.
Efforts made by devolved nations will be hampered by this Bill. We heard that last week from the Scottish Trades Union Congress. During evidence, Roz Foyer spoke about the Fair Work First scheme, which gives guidance for organisations seeking an award through public sector grants, contracts and other funding. Essentially, it is the Scottish Government’s approach to contracting. Scotland does not have the power to legislate on employment law—yet—but through programmes such as Fair Work First we have wide-ranging guidance and a number of benchmarks that contractors are held to in order to receive public money.
As I say, Scotland cannot implement laws in relation to employment, but it uses the right to implement and use money accordingly. Roz Foyer ended her point with something absolutely crucial. She said:
“I believe that is a very legitimate way to create a landscape of better employment rights and good practice, both domestically and internationally, and that work would be severely undermined by the current proposals.”––[Official Report, Economic Activity of Public Bodies (Overseas Matters) Public Bill Committee, 5 September 2023; c. 71, Q113.]
It is unprecedented that the Bill would prohibit Scottish Government Ministers from taking moral or political objections towards foreign state conducts into account when making procurement and investment decisions. A key concern is that the Bill alters the Executive competence of Scottish Government Ministers. Therefore, earlier this year, they lodged a legislative consent memorandum within the Scottish Parliament, as the Minister knows. Scottish Ministers have the ability, to the extent permitted by procurement legislation, to consider the country or territorial origin or other territorial considerations in a way that indicates political or moral disapproval of a foreign state when making decisions about procurement or investment.
An example, which the memorandum talks about, is the position taken by Scottish Government Ministers in relation to procuring goods from Russian suppliers following the invasion of Ukraine. That was the correct thing to do. If the Bill passes it will restrict, if not entirely remove, that ability and alter the executive competence of Scottish Ministers.
As we know, clause 4, which I will refer to later on, would make it unlawful for Scottish Ministers to even state that they would have acted differently if it were not for the provisions of the Bill. The Scottish Government’s memorandum outlines three principal decisions as to why they should not give their consent to the Bill, and I want to outline them. When the Committee hears the Scottish Government’s rationale, our reasons for tabling the amendments will be clear.
First, can the Minister provide some clarity? It is not clear what problem the UK Government seek to address by including Scottish Ministers within the scope of the Bill. [Interruption.] Hear me out. I know the Minister will probably turn around and say, “Scottish Government Ministers have to listen to the UK Government because we have reserved powers on matters of foreign policy.” However, we struggle to understand this. The Scottish Government have always acted responsibly and in line with the UK’s international commitments. Scotland is not an independent country—yet—so the argument that a decision of the Scottish Government in relation to a particular procurement or investment process may be mistaken by overseas Governments for an alternative UK foreign policy lacks credibility. It just does not make sense.
When I join international delegations, I will talk about the good work that the SNP’s Scottish Government are doing. For example, people are quite interested in the baby box—a groundbreaking piece of policy that gives every single baby born in Scotland a box. Please bear with me, Chair, as this will come back to the Bill. When I am abroad and I talk to people about the SNP’s baby box, they understand that the legislation is from Scotland; it is not UK-wide. People might not understand the intricacies of devolved and reserved matters—as a former modern studies teacher I take great pride in explaining this to people—but they do understand that foreign policy is set by the UK Government. It is not clear what the Bill seeks to address by including Scottish Government Ministers.
Secondly, the Scottish Government take a value-based approach to international engagement. I know that because up until my promotion to SNP levelling-up spokesperson last week, I led on international development for the SNP—I will give myself that shout-out. [Hon. Members: “Hear, hear!”] I thank hon. Members. I know that at the heart of the Scottish Government, international activity creates opportunity at home, broadens horizons, attracts high-quality investment and ultimately benefits the people of Scotland. While the Scottish Government will always meet the obligations placed upon them by international law and treaties, people in Scotland quite rightly expect that decisions should not be made in an ethical or moral vacuum.
Thirdly, the Scottish Government memorandum talks a lot about clause 4 and I will speak about that later. However, I would be interested to hear from the Minister about this. I still do not understand, as my hon. Friend the Member for Glasgow South West said, what a Scottish Government Minister needs to say when on television or giving a quote to a newspaper. Do they have to turn around and say, “I am talking as a Scottish Government Minister”, “I am talking as an SNP MSP,” or “I am talking as an individual”? We need some clarity from the Minister on that.
The Scottish Government, of course, recommended that the Scottish Parliament does not give consent to the Bill. I urge the Minister to take heed. My amendments are all in regard to Scotland and understanding why Scotland has been included in this. Can the Minister take heed and pay attention to that?
It gives me great pleasure to follow my hon. Friend the Member for Airdrie and Shotts, who is taking over as the levelling-up spokesperson after this Committee. I want to support her amendments for several reasons. First, procurement is devolved to the Scottish Parliament. That is clear, as we heard in the evidence sessions in the questions asked not just by myself but by my Labour colleagues around the effects of procurement in the devolved Administrations.
There is real concern that the Bill seems to override the devolved Parliaments in this area. The devolved Parliaments clearly and correctly suggest that they would want to use their procurement in an ethical way. The problem that we have, of course, is that witness after witness was saying, and those speaking on behalf of the Bill were saying, “It’s up to the Westminster Government to dictate foreign policy.” Well, that gets us only so far. Every local authority that I can recall in Scotland in the lead-up to the Iraq war had a vote on whether it supported the war. Will this Bill seek to stop that sort of activity? Witnesses said last week that this would have stopped what Glasgow District Council did in 1981 in relation to South Africa.
Half a billion years ago, the land masses now known as Scotland and England joined up physically. They are playing a football match tonight. I am quite nervous because Scotland do not do too well against the lesser nations when it comes to football, as we know, but we will see what happens tonight.
We have to be very clear here. The Scottish Parliament was reconvened in 1999. Devolution was approved overwhelmingly by the people of Scotland. I do not think that the people of Scotland will take too kindly to a Westminster Government who seek to impinge on the devolved matters and devolved legislation of the Scottish Parliament.
Thank you, Sir George; it is a pleasure to serve under your chairmanship. I would like to speak to amendment 1 and make it clear that it is to clause 17 but there is an opportunity to discuss it at this time because it deals with the issue of devolution. As is very clear, the Bill applies to the whole United Kingdom, but for it to operate in Wales, Scotland and Northern Ireland, certain legislative consent motions have to be agreed under the Sewel convention. That is because the Bill impinges on at least some of the competencies of the Ministers of the devolved institutions. That is made clear by the Library note. There is an impact on the devolution settlement, and it has to be worked through within the context of that settlement.
Amendment 1 makes the process clear, to avoid any misunderstanding. As we know, there have been constitutional debates, even arguments, between the Government here in Westminster and the devolved institutions, particularly the Scottish Parliament. This amendment simply sets out what is legally the case. It is not a contentious amendment. It simply puts in black and white what is the reality and should be adhered to by all parties. The Government had advance notice of the amendment, and there has been some discussion of it. I urge the Government, given that they are adhering to the idea of mutual respect between the institutions of the United Kingdom, to accept amendment 1. It is uncontentious; it is Government policy. It makes clear what the devolved settlement is in reality.
The hon. Gentleman is making an excellent point. Does he support the position that I laid out, which is that procurement is viewed very seriously by the devolved Administrations and there is concern that the Bill seeks to interfere negatively in that?
Many aspects of procurement and other aspects touched on in this Bill are in part devolved to the various institutions. We have a complex mosaic in the UK: the devolution settlements for Wales, Northern Ireland and Scotland are different in several respects. Nevertheless, the overriding fact is that there is definitely an impingement on devolution powers, however they are defined in the circumstances, and the Sewel convention is needed to ensure that there is common agreement on what is being done by central Government.
I refer in particular to the Northern Ireland situation, because we have received written evidence from the chief executive of the Northern Ireland Local Government Officer Superannuation Committee, David Murphy. He makes the point that as far as Northern Ireland is concerned, there is the Public Service Pensions Act (Northern Ireland) 2014, which effectively devolves public sector pensions in large part to the Northern Ireland Assembly. He goes on to conclude, after having described the arrangements:
“It is our understanding that in the absence of the NI Assembly sitting it will not be possible to obtain a Legislative Consent Motion for the proposed legislation.”
The purpose of the Bill is to ensure that we do not have any public authorities, whether that is Scottish Government Ministers, Scottish local authorities or English local authorities, taking different foreign policy decisions.
Let me continue, please. I will come on to address a few of the points in relation to procurement and divestment when it represents political and moral disapproval of a foreign state’s conduct. I want to reassure the hon. Member for Airdrie and Shotts on a few points. As for Glasgow City Council changing the name of a street, nothing in the Bill changes the council’s ability to do that.
No, I want to continue to make these points for the sake of clarity and address some of the issues.
Similarly, a Scottish Government Minister could say they oppose the Iraq war. The Bill applies when investment and procurement decisions are based on moral and political disapproval of a foreign state’s conduct.
I am grateful to the Minister for giving way. I know she is trying to clarify the situation, but I am afraid that those of us who are Glaswegian and proud of our Glaswegian roots are concerned that the Bill will prevent the actions that Glasgow took in the 1980s from happening again. The Conservative Government’s policy in the 1980s was against sanctions in South Africa, and Strathclyde Regional Council, City of Glasgow District Council and other Scottish local authorities decided to take investment and procurement decisions against the apartheid state of South Africa. City of Glasgow District Council was allowed to rename a street and give someone the freedom of the city, but would it have been able to take the decision to disinvest from apartheid South Africa had the Bill been in place in the 1980s?
If Government sanctions exist, they continue to exist. The Bill is specifically to prohibit divestment and procurement decisions.
I want to address the point made by the hon. Member for Airdrie and Shotts in relation to Russia. I give her my assurance that we will look to introduce a statutory instrument to exempt Russia and Belarus from the provisions of the Bill.
Amendment 30 would remove the decisions of Scottish Ministers from the scope of the Bill, and a carve-out for the decisions of Scottish Ministers would be inserted into clause 2. It is not clear whether the hon. Member for Airdrie and Shotts intends for the amendment to be read alongside amendments 15 to 17. Clause 2 applies the ban in clause 1 only to public authorities, as defined in section 6 of the Human Rights Act 1998. The clause also carefully defines decisions in scope only as those related to a public authority’s investment and procurement functions, which is the point I keep coming back to. I would like to reiterate my response to amendments 15 to 17 by saying it is absolutely essential that the Bill extends to public authorities across the entirety of the UK. That will include Ministers, Departments and agencies in the devolved Administrations, who have also faced pressure to engage in BDS activity.
As I have said, foreign policy is reserved, so it does not trigger a legislative consent motion. However, as the ban applies to the Ministers of the devolved Administrations, this may alter their Executive competence. We have therefore formally engaged the legislative consent process, and I look forward to discussing the Bill further with my counterparts in the devolved Administrations. The Government are not seeking legislative consent for the rest of the Bill’s provisions, as the other provisions do not trigger the legislative consent process.
I was asked specifically about how the Bill affects Northern Ireland. Given the continued absence of the Northern Ireland Assembly and Executive, a legislative consent motion cannot be secured currently. It is important that the Bill applies in Northern Ireland to ensure that the people of Northern Ireland benefit from these important protections. UK Government officials will work with counterparts in Northern Ireland to discuss the Bill’s contents and provisions, along with the Bill’s devolution analysis. We are hopeful that when the Assembly is restored, it will be able to consider and support a legislative consent motion for the Bill.
On a point of order, Sir George. There was some confusion because of the number of amendments in the group. Could you clarify that some of the amendments we have debated are to other clauses, and that there will be Divisions when we get to those clauses? It would help Members if you could explain that.
That is indeed a point of order. The remaining amendments in the group will be taken either in the next clause or later, when we come to clause 17, because they are consequential on the lead amendment.
Clause 3
Exceptions
I beg to move amendment 2, in clause 3, page 2, line 40, at end insert—
“(4A) Section 1 does not apply to a decision which has been made in accordance with a Statement of Policy Relating to Human Rights.
(4B) A Statement of Policy Relating to Human Rights—
(a) is a public authority’s policy criteria relating to disinvestment in cases concerning contravention of human rights; and
(b) must be applied consistently by the public authority to all foreign countries.
(4C) Within 60 days of the passing of this Act, the Secretary of State must publish, and lay before Parliament, guidance on the form, content and application of Statements for the purposes of this section.
(4D) Public authorities must have regard to the guidance referenced in subsection (4C) when devising a Statement.”
This amendment would exempt public bodies from the prohibition in section 1, where the decision has been made in accordance with a Statement of Policy Relating to Human Rights. A Statement may not single out individual nations, but would have to be applied consistently, and in accordance with guidance published by the Secretary of State.
We heard on Second Reading, and again today, that the Government want to put disapproval of the conduct of foreign states and their territories beyond the scope of competent activity for local public bodies, in order to stop public bodies taking partial and potentially harmful stances. However, this Bill is akin to using a nuclear weapon to crack that nut. We have just heard from the Minister that the Government are so concerned about the unintended consequences the Bill may have that they are having to reserve the powers to change it quickly later, lest a public body be shut down for a number of months. The Committee just accepted that change, but it is yet another power grab by the Secretary of State and it is heavy-handed in its enforcement.
Amendment 2 sets out an alternative approach. We have been clear from the outset that it is possible to achieve what both the Government and the Opposition wish to achieve but without the overreach of the Bill in its current form. Amendment 2 would allow a public body to produce a document that sets out its policy on procurement and human rights and for that to be developed in accordance with guidance published by the Secretary of State. This is a relatively long-held Opposition policy. Indeed, it is similar to an amendment I tabled to the Procurement Bill many months ago. It is vital that procurement decisions made with regard to human rights issues be applied across the board, not just to prevent unethical actions against specific states but to ensure that common actions have the greatest impact.
Such a statement of ethical policy would thus ensure consistency in how contracting authorities—or public bodies more generally—decide on such matters, and inconsistent application would be prohibited. The practical effect would be to make it unambiguous that if a public body does not wish to procure goods from Russia because of President Putin’s abhorrent human rights abuses in Ukraine, the law will be on its side. If the same body does not wish to procure services from Xinjiang because of the appalling treatment of Uyghur Muslims, the law will be on its side.
The hon. Gentleman is making an excellent speech. In our evidence sessions, we heard very powerful testimony from Uyghur society and the Uyghur people, who said that we really need to look at this part of the Bill. Does he also agree that it is very interesting that witnesses on the Government’s side support disinvestment for China, for the very reasons that he has just outlined?
Amendment 2 would exempt decisions from the ban that have been made in accordance with a statement of policy relating to human rights, produced by a public authority. The Secretary of State would be required to produce guidance on the content of any such statement, to which public authorities would be required to have regard.
Seventy-five years on from the signing of the universal declaration of human rights, the UK remains steadfastly committed to an open international order, a world where democracy and freedoms grow and where autocracy is challenged. We put open societies and the protection of human rights around the world at the heart of what we do. That includes our membership of the Human Rights Council, robust action to hold Russia to account over its actions in Ukraine and at home, calling out China in Xinjiang, leading the call for the special session on the human rights implications of the conflict in Sudan, and our global human rights sanctions regime.
We continue to work with our partners, civil society and human rights defenders to encourage all states to defend democracy and freedom and to hold those who violate human rights to account. Our annual human rights and democracy reports are an important part of that work. This Government, Foreign, Commonwealth and Development Office Ministers and officials continue to defend individual rights and freedoms, including through regularly raising concerns with other Governments. Our resolve to ensure that everyone can enjoy their rights is unwavering.
The international rules-based system is critical to protecting and realising the human rights and freedoms of people all over the world. We work through the multilateral system to encourage all states to uphold their international human rights obligations and to hold those who violate human rights to account. We are all in agreement that human rights abuses have no place in public supply chains.
I am concerned, however, that this amendment would give public authorities too much discretion to apply blanket boycotts. I also believe that the amendment is unnecessary because of the work that the Government are already doing in the Procurement Bill, which I will address in more detail.
The Procurement Bill already contains a robust regime for the exclusion of suppliers that are unfit to hold public contracts. That Bill sets out a wide range of exclusion grounds that target the most serious risks to public procurement, including modern slavery and human trafficking. The Cabinet Office has strengthened the way in which these terms are defined, so that suppliers may be excluded where there is sufficient evidence that they are responsible for abuses anywhere in the world, whether or not they have been convicted of an offence.
We have mirrored in this Bill the exclusion grounds in the Procurement Bill that pose the most significant risk to public procurement as exceptions to the ban, including for modern slavery and human trafficking. This means that public authorities will be allowed to make a territorial consideration that is influenced by moral or political disapproval of foreign state conduct in so far as it relates to one of the considerations listed in the schedule.
Moreover, there is guidance to help contracting authorities to address human rights risks, and there is well-established practice throughout the procurement process. That detailed and thorough guidance includes sections on managing risks from new procurements and assessing existing contracts, taking action when victims of modern slavery or human rights abuses are identified, and supply chain mapping, and it includes useful tools and training.
For the reasons that I have set out, this amendment is unnecessary, but I am also concerned that it would give authorities too broad a discretion to apply blanket boycotts. The amendment would allow authorities to exclude suppliers from entire nations without proper consideration of whether a supplier itself had had any involvement in the abuse. To exclude suppliers based solely on where they are located conflicts with the open principles of our procurement regime and would in some cases be contrary to the UK’s international obligations, such as non-discrimination requirements set out in the World Trade Organisation agreement on Government procurement.
As I have previously stated, foreign policy is a matter for the UK Government and not an issue for public bodies. It is not appropriate for public bodies to be producing their own policies on human rights in relation to other nations. This amendment would undermine the intentions of the Bill, leaving public authorities distracted by questions and debate about their human rights statements and the foreign policy that lies behind that. Many public authorities with no interest or expertise in such debates would come under pressure to produce statements or to explain why they did not have one. The discretion for public authorities, even acting within Government guidance, would mean a multitude and divergence of foreign policies across our public institutions and a confusing picture on the international stage of what the elected Government’s foreign policy was. My concern is that, were this amendment to be agreed to, every local authority and public body would feel the need to produce such a statement even though they felt that they had no expertise in human rights. I am concerned that it would increase the level of dissension and community friction rather than in any way lessening it.
I just want to clarify that nothing in this Bill affects private individuals and private companies and their ability, clearly, to boycott or divest.
That is the double standard in the Bill: private companies can do what they like, but public bodies cannot. If I understand the Minister’s line of argument, she is concerned that this amendment could be used or abused by local authorities, but proposed new subsection (4C) specifically gives the Government the power to stop any blanket boycott. That somewhat negates her arguments.
Lastly, does the Minister agree with the position of any local authority that wishes to disinvest from China and Xinjiang in particular because of its treatment of the Uyghur Muslims?
In its present form, the Bill will introduce a blanket prevention of public authorities’ ability to take into account human rights—the Government would say foreign policy—when making certain decisions. There can be exceptions; we have heard the Government mention Belarus and Russia. Yet for Israel, the Occupied Palestinian Territories and the Golan Heights to be exempted, it is not enough for a Secretary of State to bring forward a statutory instrument; primary legislation will be required.
We have a fundamental problem with the clause, which is the conflation of Israel with the Occupied Palestinian Territories and the Golan Heights. Israel is a sovereign state; the Occupied Palestinian Territories and the Golan Heights are areas that have been occupied since 1967, and the occupation is deemed illegal under international law. In fact, it is not simply international law; the Government themselves have—until now, it seems—held that position very firmly. Let me quote from a fairly innocuous document, the Government’s guidance on overseas business risk, which was only published in February 2022:
“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.”
That has been the Government’s position, clearly and consistently expressed.
The hon. Gentleman presents a very powerful position. Members on the Opposition Benches have been told by the Government that the Bill should comply with Foreign Office policy. It seems that the Government are now deviating from Foreign Office policy. It should not be one rule for the Government and one rule for every other public body, should it?
There might well be something in what the hon. Gentleman suggests. There is, to be honest, a not-too-subtle change in the Government’s emphasis and in their exposition on this matter. Equating Israel and the occupied territories is unique in any British legislation, let alone any Government statement; it questions the long-standing position of the United Kingdom supporting a two-state solution based on 1967 lines.
There is also the question of international law. In his first written submission to the Committee, Richard Hermer KC cited the advisory opinion of the International Court of Justice concerning the construction of a wall in the Occupied Palestinian Territories. In his second written submission, he also made reference to the United Nations.
I respectfully remind the Committee that the UK is a founding signatory of the charter of the United Nations and is obliged to comply with Security Council resolutions. Security Council resolution 2334 very clearly expresses the concern about Israeli settlements in the Occupied Palestinian Territories; I want to emphasise that point. Operative paragraph 1 of the resolution states very clearly that the Security Council
“Reaffirms that the establishment by Israel of settlements in the Palestinian territory occupied since 1967, including East Jerusalem, has no legal validity and constitutes a flagrant violation under international law and a major obstacle to the achievement of the two-State solution and a just, lasting and comprehensive peace”.
Operative paragraph 5 imposes an international-law obligation on all states to ensure that they treat the OPT differently from Israel. It states that the Security Council
“Calls upon all States, bearing in mind paragraph 1 of this resolution, to distinguish, in their relevant dealings, between the territory of the State of Israel and the territories occupied since 1967”.
In summation, clause 3(7) is incompatible with international law, for two very solid, basic reasons. First, it gives special protection to goods and services from both Israel and the Occupied Palestinian Territories. Moreover, it gives greater protection to illegal settlements in the OPT than it does to any other state in the world except Israel. That is quite incredible. If that does not suggest a change in Government policy, what on earth would? It seriously draws into question the Government’s commitment to international law—if that doesn’t, I don’t know what does.
Secondly, clause 3(7) fails to differentiate between Israel and the Occupied Palestinian Territories. I do not want particularly to be in this Committee to make history: I want the Government to say, “Yes, we are being consistent. We have said this all along. We are not nudging Parliament to a change in policy. We are reaffirming where we stand.” That is the right decision to make. I am pleased to say that there has been genuine consensus in Parliament on the issue of Israel and the Occupied Palestinian Territories. I do not want to see that consensus being weakened, and I certainly do not want to see it being shattered. I fear that this legislation is the thin end of the wedge.