Public Procurement

Debate between Jacob Rees-Mogg and Lord Watts

Tuesday 6th March 2012 Commons Chamber

[Jacob Rees-Mogg]

With enormous success, which is acknowledged around the country and for which we are all grateful. However, I agree with the fundamental point that it is a political rather than a theological reality in this case.

By virtue of article 5 of protocol No. 2, any draft legislative Act should contain a “detailed statement” making it possible to appraise its compliance with the principles of subsidiarity and proportionality.

I turn now to the Committee’s view, as expressed in the draft reasoned opinion. The first conclusion we came to was that the Commission had failed to consult member states in the Green Paper, or otherwise, on the possibility of setting up a single national oversight body. This is in clear breach of article 2 of protocol No. 2, and I ask the Minister to say whether he agrees with this, and whether he intends to pursue it with the Commission.

Similarly, there is no evidence in the Commission’s explanatory memorandum or impact assessment of it carrying out the requirement under article 5 of protocol No. 2 to prepare a “detailed statement” containing

“some assessment . . . in the case of a directive of its implications for the rules to be put in place by Member States, including where necessary the regional legislation”.

As a consequence, the draft directive on public procurement and, by implication, the draft directive on procurement by public entities is said by the National Assembly for Wales to breach the devolution principle in both Wales and Scotland. I quote from the letter of 23 February from the National Assembly for Wales:

“The proposal also fails to have regard to the principle of devolution in imposing the duties on a single body.”

[Mr Watts]

I agree wholeheartedly with the thrust of the hon. Gentleman’s speech. The only weakness that I perceive is that it is clear to me that the Commission believes that there is not fair trade within Europe. Some countries abide by the rules and others do not. We have heard examples of that today. How would the hon. Gentleman address that problem?

[Jacob Rees-Mogg]

I am in complete agreement with the hon. Gentleman that one of the problems of the European Union has long been that we as a nation are particularly good at obeying the rules and our continental colleagues are not necessarily so good at obeying the rules. This is for all sorts of historical reasons and understanding of our constitution as against their constitutions. The problem, and the reason why I am fairly relaxed about them not obeying the rules, is that one would have to argue for more Europe and more intrusive regulation to get them to obey the rules. That would be a bad thing. I happen to believe, though I am not sure that Opposition Members share this view, that one-way free trade encourages efficiency in the home economy, that one can compete very effectively even with one-way free trade, and that we should be relatively relaxed about how they cheat, if I am allowed to use such a term in relation to our continental friends.

The National Assembly for Wales went on to say about the proposal:

“It fails to reflect the way in which separate implementing regulations have hitherto been made in Scotland, and the way in which extensive administrative and advisory functions in relation to procurement in Wales are exercised by or on behalf of Welsh Ministers.”

The Government’s explanatory memorandum does not consider the impact of the proposals on the devolution settlement, so I would be grateful if the Minister said whether the Government agree with the concerns raised.

Before turning to the Committee’s final conclusion, I should emphasise how important it is that the Commission, which has considerable executive power to initiate legislation, is obliged to consult properly, and prepare a “detailed statement” which assesses its proposals for compliance with subsidiarity. If it does not do so, we risk ending up with a provision such as this, which conflicts with a fundamental principle of the UK’s constitution. I trust that the Government agree with this and will take the Commission to task over it.

Finally, I turn to the proposal to establish a national oversight body, which not only would have a range of administrative and regulatory powers, but could “seize” the jurisdiction of the courts. The Committee thought this an alarming proposal, and it really is. It hits against the heart of our understanding of the separation of powers between governmental agencies and the judiciary. Again, no consultation on that proposal took place and it was not in the Green Paper—it came out later—so we have this great leap in our understanding of the law without any proper consultation. The Committee concluded that the proposal amounted to an unwarranted interference in the domestic legal order of the United Kingdom, where administrative and judicial powers have traditionally been exercised separately, and so infringed the principle of subsidiarity.

The Committee also considered that the combination of functions would be likely to prevent the oversight body from acting judicially without suspicion of a conflict of interest—we looked at that fairly recently when the European Court of Justice ruled in its own favour over the pay of EU officials, so we know how corrupt these EU courts can be—contrary to article 6(1) of the European convention on human rights. That is the core of the matter. It undermines one of the principal objectives of these two directives: to increase legal certainty in the award of procurement contracts. It is for these reasons that the Committee asks the House to approve the Government’s motion on subsidiarity.