Police Procurement (Motor Vehicles)

Christian Matheson Excerpts

Thursday 16th July 2015 Westminster Hall

[Christian Matheson (City of Chester) (Lab)]

I beg to move,

That this House has considered police procurement of motor vehicles.

I am grateful for having secured today’s debate in conjunction with my hon. Friend the Member for Ellesmere Port and Neston (Justin Madders).

As the Government struggle to find an answer to their woes about Britain’s lack of productivity and as globalised corporations continue to send more British manufacturing and engineering abroad—not because build quality is better, but simply to boost their own short-term profits—we still have a lead in one sector, in which we are globally renowned. That sector is the automotive industry, where the UK is steaming ahead with a global lead based on design innovation, engineering excellence, manufacturing quality, investment in skills and a commitment by managers and employees alike to work together to achieve common aims of success and, crucially, to share the fruits fairly.

The automotive sector in the UK presents an ideal opportunity for the Government to implement a positive procurement strategy. More than 600 automotive companies are based in the UK, employing just over 730,000 people and turning over more than £60 billion. The UK produces 1.6 million cars and commercial vehicles and over 2.6 million engines every year. We are now the second largest vehicles market and fourth largest vehicles manufacturer in the European Union. We are also the second largest premium vehicles manufacturer after Germany. Some 80% of all vehicles produced in the UK are exported and, for the first time since the 1970s, the UK has a trade surplus and a positive balance of payments for the auto sector. Take the Range Rover Evoque, built by Jaguar Land Rover in Halewood: demand is such that they cannot build the cars quickly enough. Think also of Nissan’s massive success with vehicles such as the Qashqai or the LEAF.

Yet for all its success, the automotive sector remains if not precarious, then never quite secure. Car firms are only as good as their next model, and the allocation of work to plants across a group will take place many years before production commences. In my former role as an official with Unite the union—I am still a member—and its predecessors, I twice joined in negotiations with the global management of General Motors to try to save the Vauxhall plant at Ellesmere Port. These are tough discussions with big global players that see local management and workers fighting together for their plant but often having to make difficult concessions on pay and working hours to remain competitive. Government assistance to support that competitive position is always welcome, because there is no such thing as long-term security in the car industry.

At this stage, the Home Office Minister may be forgiven for wondering whether it is he or I who is in the wrong debate, but we are sadly now at a point when the Home Office has a direct interest in the motor vehicle industry. Through the central purchasing system set up by the Government and administered by the Cabinet Office, a consortium of around 22 police forces, including my own in Cheshire, are on the verge of signing a procurement deal for police vehicles. Despite the abundance of quality in the UK car manufacturing sector, it is reported that the principal deal is likely to be with Peugeot. No other major EU country would betray one of its leading industries in this way. I challenge all hon. Members to go to Germany and find a police car that is not an Audi, a Mercedes or a Volkswagen or to go to France and find a police car that is not a Peugeot, a Citroen or a Renault.

We must recognise that the supply chain works right across Europe and helps both British companies and those who supply into the British-made market, but is not just the failure to buy British that is the scandal here. There is a double insult because Peugeot chose not to manufacture in this country. In 2006, it closed its plant at Ryton in Coventry and moved the work to Slovenia—lock, stock and barrel. It was not that Ryton was unprofitable or unproductive; it was simply that the global management of Peugeot believed that bigger short-term profits could be made by moving to a country where manufacturing costs are lower. That is its prerogative, even if it did put 3,000 skilled British workers out of well-paid jobs.

That being the case, why on earth, just a few short years later, are we considering rewarding Peugeot with a massive public sector contract, having seemingly forgotten its betrayal of a loyal British workforce?

[Keith Vaz (Leicester East) (Lab)]

I congratulate my hon. Friend on securing this important debate. Had he not done so, we would simply not have been aware that the deal is about to be done. I support him when he says that we should always seek to buy British, but does he agree that, provided that they buy British, it is right that police forces should collaborate in order to procure?

[Christian Matheson]

My right hon. Friend is absolutely right. We must surely welcome collaboration between police forces if it leads to greater efficiency and greater savings. We cannot dismiss that process, but wider considerations must be taken into account in the police consortium’s discussions, and I will talk about that later.

In times of austerity, it cannot be right that we are potentially taking millions of pounds of British taxpayers’ cash and posting it across the channel. Does that really represent value for money for British taxpayers? Part of the problem has been with how the Government transposed the EU procurement directive. By transposing the directive into UK law in a weaker form than that adopted by our EU partners, the Government have left the British manufacturing industry at a serious competitive disadvantage. Article 1 of the new directive states the fundamental principle of the right of member states to define and run their public services in their own interests, and as such they are not subject to marketisation under EU law. However, the UK Government decided not to transpose that section and have excluded any reference to that principle within the regulations.

The mandatory considerations in article 18(2) lay down the labour law standards and working conditions that must be respected throughout the stages of the public procurement procedure. Additional social, economic, quality and environmental criteria are those that provide the flexibility to enable contracting authorities to promote sustainable and positive procurement policies. Unfortunately, the Government have taken a distinctly minimalist approach to implementing that article.

Returning to the point that I made in response to my right hon. Friend the Member for Leicester East (Keith Vaz), all this means that the only consideration that ever seems to be taken into account is one of bare cost. I simply cannot understand why the Government, or other public authorities such as the consortium or police and crime commissioners, are so keen to open the doors to foreign corporate bidders and hand over huge public sums to globalised corporations that hold no loyalty to the UK, given that other corporations of similar size and stature have made a commitment to this country by choosing to site and manufacture here. One thing is for sure: it was not due to some Damascene conversion to the European ideal that the Government chose to water down the directive.

Returning to my right hon. Friend’s point, I accept that cost must be a central factor in procurement decisions, as is the question of whether the chosen equipment can actually do the job it is being purchased to do. However, in addition to those two principles, there must surely be a cost-benefit consideration for the British economy more widely.

We must support skilled employment, retain skills and provide opportunities for real apprenticeships, which the Government are keen to promote, as opposed to the more cheap and cheerful training courses. The automotive industry has led the way in providing quality training and apprenticeships, and in bringing real skills and design innovation into this country. It has given real value to the country, and we should be supporting it in its success. Instead, we appear to be failing to stand up for British jobs and skills by intending to reward a firm that specifically chose to turn its back on this country.

There is still hope, however. I ask the Minister to urge the police and crime commissioners to review the decision. He must urge them not to sign the contract with Peugeot—if there is still time—and to consider other British bidders. He must save the PCCs from shame and obloquy by preventing them from handing over huge quantities of taxpayers’ cash to a foreign corporation, when British firms would not have had the chance to do the same in other EU countries, which actually fight for their manufacturing base and as a result have a much more balanced economy.

I doubt whether, when the Minister took the Prime Minister’s call and accepted a position in the Home Office and the Department of Justice, he realised that striking a blow to Britain’s car industry would be at the top of his agenda within a matter of a couple of months. He has the power to call a pause to what I believe is a crazy, crackpot scheme. I urge him to use it and to fight for British jobs, British skills and the British working people, whom the Government claim to be so fond of championing. Now is the time to stand up for Britain. I ask the Minister to step up and meet the challenge.

--- Later in debate ---

[Keith Vaz]

I am happy to do so. That is the second thing that I have learned this afternoon. I did not know that, and I think that Leicestershire should be part of a consortium or collaboration because that is the best way, working together among the various police forces, that we can get the best possible deal for taxpayers.

We have not yet reached the Scottish situation outlined by the hon. Member for Dumfries and Galloway (Richard Arkless) in which there is one police force and one chief constable who can work with the national Government to procure the best deal. Who knows whether we may be looking in that direction? I have just been looking at the evidence that the permanent secretary at the Home Office gave on Monday to the Public Accounts Committee. He hinted at economies of scale with reference to mergers. I do not say that we are going to consider mergers, because that always causes a lot of concern among hon. Members, who are all keen to preserve their local police forces. However, value for money is an important criterion.

My second point, and I suppose a more important one for the present debate, is what kind of vehicles we would like our police officers to be in. Of course as British citizens we would like them to be in vehicles manufactured in our country. When we considered the issue of value for money, we found that cheapest is not always best. Of course we would want the best possible deal. I am not sure how the bidding process happens—whether by sealed bid or open negotiations; but I think that if there were a way for the consortium to put to a British manufacturer the deal that it had got with a foreign one, to see whether it could be matched in this country, that should be done.

The only way that can be done, of course, is if what has happened is properly examined. I promise my hon. Friends the Members for City of Chester and for Ellesmere Port and Neston that I will write to whoever is the lead in the consortium—as the Minister has made it clear that he will not be signing the contract, at the end—and ask the reason for the decision. Buying British is not always the best option. We are not the ones who sit at the negotiating table, in the end. However, both my hon. Friends have made a compelling case for the matter to be looked at carefully, and of course we want the police to use vehicles made in this country, if that is possible.

[Christian Matheson]

My right hon. Friend makes a good point about the importance of buying British. Does he accept that there may be occasions when the model that would best meet the specifications is not made in the United Kingdom, but is made by a manufacturer that has made a commitment to the UK by manufacturing other models here? Perhaps that would not be ideal, but we might at least consider such manufacturers that have made a commitment to UK jobs, skills and prosperity.

[Keith Vaz]

My hon. Friend makes an interesting point, and I support it. I have not heard it before. As to whether we should have a system of contract compliance for public sector contracts, I am quite attracted to that. I think a commitment to this country would be a good idea. I do not have enough knowledge of the detail, unlike my hon. Friends, but we need to consider that carefully. Even at what sounds like the 11th hour, I hope that those concerned will pause and consider what is happening. In bringing the matter before the House my hon. Friends have brought to my attention, and that of the Select Committee, something we did not know about before.

My final point is about the nature of the private sector’s relationship with the public sector. We examined that in the context of Olympic delivery, when a large Government contract was outsourced to G4S and we found that it was at fault; what it was prepared to deliver was wanting. That was the eve of the Olympics and there was not much chance to do much; we had to accept what G4S said. However, very large companies such as G4S and Serco, which are not necessarily British but may be global, with headquarters here and paying taxes elsewhere, may try to get the Home Office and other Departments over a barrel because of their size. I am sure that the Select Committee will want to look at that in the future, especially when we examine Mark Sedwill and his role as permanent secretary.

Those things come to Ministers at the end, and there is a lot of pressure on them to settle for the best possible deal, which sometimes means the cheapest. However, we know that in the present case the decision will not be made by the Minister who is here today. We will have to look at the issue again, because the private sector is powerful and has enormous sway over Government decisions. I hope that in future the Select Committee will look at what this afternoon’s short debate has opened up—the way in which private sector organisations deal with the Home Office, in particular—because that is our remit. That might have wider implications for other Departments.

I hope that my hon. Friends the Members for City of Chester and for Ellesmere Port and Neston will be successful in getting a short pause to allow people to think again before the deal is signed. As we know, once a contract is signed—as we found with e-Borders and the cost to the taxpayer of, in the end, £750 million—there is nothing we can do. It is better to stop and consider carefully before signing the deal, and I urge those involved to do that.

--- Later in debate ---

[Christian Matheson]

Thank you, Mr Brady, for presiding over the debate. I thank right hon. and hon. Members for joining in, and pay tribute to the Minister for his characteristically forthright and honest approach. He asked us to look at his experience and track record, which suggests that he understands at least some of the issues we have raised, and I am grateful for that. The one question I would like him to ponder after the debate is why, if he has been advised that my proposals would be illegal, the same is not the case in our partner states in the EU, such as France and Germany.

[Mike Penning]

We have some time, so it is important that I respond to that. As I mentioned earlier, when I go to ministerial meetings and meet ministerial colleagues from Europe, they often have a very different attitude to their membership. I will try to find out how they have done it. Someone mentioned Saab earlier; sadly, it went out of manufacturing and stopped producing cars. I love Saabs. I used to drive them, and they are great, fun cars to drive. I am a bit of a petrolhead, so I do get in trouble when I talk about these sorts of things.

I will find out about the legality issues relating to procurement, and I will write to Members, copying in the Chair of the Select Committee and the shadow Minister. If I have misled the House in any way, I did not mean to. I am not a lawyer, but I am trying to be as honest as possible.

[Christian Matheson]

I thank the Minister for that intervention and the interest he is taking in this issue. I am extremely grateful to the other right hon. and hon. Members who participated in the debate. The Minister mentioned future contracts; I can tell him and others present that with, I am sure, my hon. Friend the Member for Ellesmere Port and Neston (Justin Madders), I will be taking a very close interest in that process—hopefully from the start of the process this time.

[Richard Arkless]

Before we embark on that process, will the hon. Gentleman and, perhaps, the Minister commit to looking at the other side of the coin? I am not saying whether or not this is the case, but do our European partners procure items, such as vehicles, for their public services from the UK? Would it not be wise to investigate that possibility before coming to a decision?

[Christian Matheson]

It is absolutely the case that—I think that the Minister and my hon. Friend the Member for Birmingham, Erdington (Jack Dromey) referred to this fact—the supply chain in the United Kingdom does supply to businesses across Europe. I say to the hon. Member for Dumfries and Galloway (Richard Arkless): go to France and find a police car that is not a Peugeot, a Citroën or a Renault, and go to Germany and find one that is not made by a German manufacturer. This problem appears to be peculiar to the United Kingdom.

In conclusion, I thank you, Mr Brady, and other hon. Members again. The UK automotive industry is very successful and is always looking to the next model, but it is never quite as secure as it appears and needs support from the Government to maintain its success. I shall maintain my vigilance on the contracts in the coming months.

Question put and agreed to

Resolved,

That this House has considered police procurement of motor vehicles.