Procurement Bill [Lords]

Jeremy Quin Excerpts

2nd reading
Monday 9th January 2023 Commons Chamber

[The Minister for the Cabinet Office and Paymaster General (Jeremy Quin)]

I beg to move, That the Bill be now read a Second time.

At some £300 billion, public procurement accounts for around a third of all public expenditure every year. By improving the way we procure, we can save the taxpayer money, drive innovation and resilience, and deliver benefits across every region of the country. We have an opportunity, post our departure from the European Union, to create our own regulations that can help to drive transparency, prosperity and growth. The Procurement Bill seizes that opportunity and reflects three years of policy development, public consultation and detailed intensive engagement. This has included local government, the education and health sectors, businesses of all sizes, and the social enterprise sector, among others.

To ensure that the new regime is truly world leading, the Bill will fundamentally improve the UK’s public procurement regime, driving a relentless focus on value for money. It will create a simpler, more flexible commercial system that better meets our country’s needs.

[John Spellar (Warley) (Lab)]

Will the Minister give way?

[Jeremy Quin]

I give way to my right hon. Friend.

[John Spellar]

The Minister is starting out with the message that the Government are somehow able to do this because of Brexit, but it was nothing to do with European regulation that the Ministry of Defence decided to contract for naval vessels from other countries. In doing that, it was no way acting like any other European country. It was a Whitehall choice and a ministerial choice. The Government had the choice, and they should stop using this as a smokescreen.

[Jeremy Quin]

I referred to the right hon. Gentleman as my right hon. Friend because he is so familiar from my appearances at the Dispatch Box in my Ministry of Defence role, and it is lovely to hear the same lines being produced again. I am no longer in that role and I am not here to speak for the Ministry of Defence, but I think he must be referring to the fleet solid support ship programme—a prospect that will rejuvenate Harland & Wolff and really get Appledore working again. I believe that it will deliver 1,500 jobs to the UK shipbuilding industry, helping to recreate the skills that were so foolishly lost in the last round. The decisions that were made under the last Labour Government in 2005 left us with fewer yards than we would all like, and I think it was a positive decision from the Ministry of Defence to award the FSS contract as it did. I wish Harland & Wolff and the rest of the British designers the very best with it.

[John Spellar]

But is the Minister clear, now that he has left the Ministry of Defence, that the contract is not with Harland & Wolff, but with the Spanish shipbuilder Navantia and a British shell company set up only last June? There is no assurance that this work will go to British yards.

--- Later in debate ---

[Jeremy Quin]

The right hon. Member refers to Team Resolute, and I am delighted that it won the tender. The majority of that work will be undertaken in British yards—[Interruption.] We could continue to make this a discussion on defence procurement, but I think the rest of the House wants to discuss the Bill before us, as I certainly do.

[Bill Esterson (Sefton Central) (Lab)]

rose—

[Jeremy Quin]

But before doing so, I give way to the hon. Gentleman.

[Bill Esterson]

The Minister says that he is here to talk about a modern procurement system for the UK, but The Guardian is saying today that a Conservative peer who advised the Government during the pandemic helped a company to secure a £50-million contract after being introduced to the firm by another peer with financial interests in that company. Can the Minister tell us exactly which clause in the Bill he is putting forward today would have prevented that extreme example of cronyism from happening?

[Jeremy Quin]

Alas, it is a great loss to me, but I have not read The Guardian today and I am not in a position to comment in detail on what the hon. Gentleman has said. If he goes through the Bill in detail, as I and other Members have, he will find the parts that refer to declarations of conflicts of interest. These are issues that we will be significantly improving through the Bill to ensure that there can be no doubt that integrity lies at the heart of our procurements. That has always been the case, but it will be even more entrenched as a result of the provisions of this Bill.

[Bill Esterson]

rose—

[Jeremy Quin]

I hope that the hon. Gentleman will allow me to make some progress. If I give two chances to every Member, we will be here for a much longer time.

There are currently hundreds of procurement regulations spread over four different regimes for different types of procurement. We will consolidate them into a single regime. This will remove duplication and create one rulebook that everyone can understand and use, with sectoral differences only where absolutely necessary, such as for reasons of defence or national security.

[Mike Amesbury (Weaver Vale) (Lab)]

Which line in the Bill will prevent, say, a future landlord who has a close relationship with a future Minister from securing a contract worth millions of pounds for personal protective equipment, or prevent someone who produces underwear, who happens to be in the other place, from securing a contract via a conversation via a VIP lane? Which line in this Bill will close that down?

[Jeremy Quin]

If the hon. Gentleman has not read the Bill, I recommend that he does so. There is a lot of it, but it is a good read and he will find it has a range of measures to ensure transparency at the heart of our procurement. I do not accept the premise of his question—if his question has a premise—that previous procurements were incorrectly awarded; far from it. If he wants to see a Bill that enhances transparency, that ensures there are always proper procedures in place to address conflicts of interest and that ensures the best propositions win tenders, he will support the Bill this evening, as I hope the rest of the House will.

[Tim Loughton (East Worthing and Shoreham) (Con)]

Perhaps I could mention something that is in the Bill, rather than not in the Bill.

I welcome the Bill, and particularly how it will benefit our small and medium-sized enterprises and the local sustainability of good-quality British products, but clause 65 was helpfully added by the noble Lord Alton and a cross-party alliance in the other House to make sure that we do not procure from countries found guilty of genocide or human rights abuses, particularly China. Can the Minister confirm that the Government not only support clause 65 but will extend it beyond just surveillance technology? We should not procure goods and services from countries found guilty of genocide or human rights abuses, such as China in Xinjiang, as verified by a vote in this House. We should just not deal with them.

[Jeremy Quin]

It is a pleasure to respond to a question about a clause in the Bill, for which I thank my hon. Friend. We are thinking through the Lords amendments, and there will be further time to discuss them in Committee. Anything that is added to the Bill must be deliverable and workable. I stress that the Bill already contains much-enhanced provisions to ensure we can prevent inappropriate suppliers from coming into our production chain, not just as primes at the top level but right through the supply chain. For example, we will be able to debar companies for misconduct or illegality. We are taking far more powers than we had under the old EU regime, which should be welcomed by all Members of this House.

[Bob Seely (Isle of Wight) (Con)]

Will my right hon. Friend give way?

[Jeremy Quin]

I will give way, but then I must make progress.

[Bob Seely]

My right hon. Friend was making a point about ethics, so I will make a point about dependency. Do the Government accept that they have purchasing power to reduce our dependency on authoritarian states, and do they accept there are lessons to be learned from the Ukrainian war, our economic and energy dependence on Russia and our economic dependence on China? Will they accept an amendment, tabled by me or by others, so that, as well as having ethics at the heart of this Bill, we can discuss how to reduce our dependency on states that seek to harm us, be it Russia, China, North Korea or Iran, etc.?

[Jeremy Quin]

I would welcome the opportunity to speak to my hon. Friend about any amendment he might table, and we would, of course, look at it seriously. I recognise the general point that this country has realised, as have all our friends, through covid and subsequently that it is incredibly important to understand our supply chains and to understand where our procurement comes from. The Bill will help us do that by enabling us to look through the entire supply chain—not just the top level, but deep inside—to make certain that we are able to stop suppliers that are effectively in misconduct, and to make certain that resilience is part of our thought process in procurement. I believe all those valuable assets are incorporated in this Bill, but I am more than happy to have further discussions with my hon. Friend.

I hope the House will forgive me if I make a little progress. Running through this Bill is a theme of greater transparency. Through the Bill, we will deliver world-leading standards of transparency in public procurement. It covers contracts awarded across the public sector, including by central and local government, arm’s length bodies, education authorities and health authorities. It also covers contracts awarded by publicly funded housing associations and by companies in the water, energy and transport sectors.

[Caroline Lucas (Brighton, Pavilion) (Green)]

The Minister is being generous in giving way. Can he indicate whether the Government will accept the amendments made in the other place requiring contracting authorities to maximise environmental benefits when awarding contracts, and particularly to ensure compliance with the Climate Change Act 2008 and the Environment Acts? Does he accept that that should not be optional, as the climate emergency is so urgent that it ought to be required by this Bill?

[Jeremy Quin]

That urgency is why we have published procurement policy notes on our commitment to net zero, just as we have published them on social value. We are keen for the Bill’s wording not to be very prescriptive, because the Government will have to announce procurement policies from time to time. I totally accept that there is a case for ensuring that our net zero commitments are met, but putting them in the Bill, which would create a big, laborious process for SMEs and procurers, be they local councils or central Government, is not the right way forward.

This Bill sets out a strong framework that gives us far more powers, but it is then open to the Government to set out, through a national procurement policy statement, the focus on social value or environmental concerns. I hope the hon. Lady accepts that the procurement policy notes we have already published show our commitment to doing just that.

[Debbie Abrahams (Oldham East and Saddleworth) (Lab)]

The Minister is being incredibly kind in giving way, and I recognise his generosity.

What measures in the Bill will protect the supply chain from collapse, as we saw with Carillion? Project bank accounts, which are already used across Government, would protect the supply chain. Thousands of small businesses went out of business or lost hundreds of thousands of pounds during Carillion’s collapse, so will the Minister introduce something like that? There is also a question about protections for retention money, so will that be included?

[Jeremy Quin]

That is a matter not so much for the Bill as for the operation of commercial practice. The outsourcing playbook has been used effectively since Carillion, and we have since seen other examples of public suppliers getting into difficulty. They are carefully monitored across Government. We will not always spot everything, but there is close working across Government to monitor our suppliers and to ensure that we can act, and act swiftly, where a supplier falls into problems.

[Debbie Abrahams]

National Highways, for example, uses project bank accounts to protect its supply chain as a matter of course, and it says that they are its preferred option. If the Department associated with National Highways is doing that, why cannot they be used across all Government Departments?

[Jeremy Quin]

I am not familiar with the specifics of project bank accounts, to be perfectly frank. We have put measures in place to protect supply chains in the event of the collapse of a prime supplier, but I will take this up with my officials and write back to the hon. Lady.

In recognition of the specific needs of defence and security procurement, and to help deliver the defence and security industrial strategy, a number of provisions specifically apply to defence and security contracts. These provisions will provide flexibility for contracts to be upgraded to refresh technology and avoid gaps in military capability. There will continue to be special rules for certain social, health and education services, to be identified in secondary legislation, that may be procured as so-called light touch contracts, recognising the particular domestic and social aspects that should be captured in such procurements.

The interaction with regulations being prepared under the Health and Care Act 2022 was the subject of particular attention when the Bill was considered in the other place, and it may well be of interest to this House. The Bill will apply to most areas of NHS procurement of goods and services to help drive efficiency and value for money. However, the Health and Care Act regime is intended to address the specific requirements of the health and care system and to fulfil the Government’s intention to deliver greater collaboration and integration in the arrangement of clinical healthcare services.

Let me be clear that the Bill strengthens the NHS’s ability to deliver. The reforms to healthcare commissioning in the Health and Care Act will give commissioners more flexibility in how they arrange services so that both procurement systems can work effectively and deliver care for patients.

The Bill sets out the key principles and objectives of public procurement. These place value for money, public benefit, transparency and integrity at the heart of our procurement system. As well as competition and efficiency, there must be good management to prevent misconduct.

[Richard Burgon (Leeds East) (Lab)]

Public procurement is one key way in which the Government can set a framework whereby employers’ standards can be driven up and a good example can be given to other employers. So will the Minister accept an amendment that gives priority when awarding Government contracts to the many thousands of companies that pay their staff the real living wage?

[Jeremy Quin]

I do not think this is the process whereby we tell employers what they should be paying their employees; that would be a big reach too far. The hon. Gentleman will be pleased that this Bill contains provisions that ensure that we can prevent companies that commit misconduct from taking part in procurements, and that can be in any range of areas. However, this is not the Bill by which we are going to be regulating employees’ pay.

[John Penrose (Weston-super-Mare) (Con)]

I welcome this Bill, particularly because, as the Minister rightly points out, it introduces far greater transparency and competition, precisely as I was calling for two years ago in the Government-commissioned report on competition policy. I am delighted to see the Bill coming forward with those measures. May I push him on value for money, which he mentions and which is clearly important? The evaluation task force, which exists jointly between his Department and the Treasury, is a tiny unit that covers a tiny fraction of Government procurement spending. Will he pledge, either today or later in the Bill’s progress, that its role will be expanded to cover far more of what we are buying, in order to make sure that we are buying things that genuinely work and it can say that things have been evaluated and either they have produced the goods or they have not, and therefore should or should not be renewed or rolled over in future?

[Jeremy Quin]

I thank my hon. Friend for the ideas he threw in our direction, which have been picked up. He is right to say that greater transparency is absolutely reflected in this Bill, and I thank him for the work he did. There has been a long lead-up to get to this Bill and we thank him very much for his support. I am proud of the evaluation task force and the work it does, not only on procurement, but on other areas of policy, looking into them to make certain that they are delivering what we intended when they were announced. That is an important tool for all Governments. I would love to see the evaluation task force grow. It is growing in experience and in the amount of projects it is taking on. It has covered a fair bit of the waterfront, but I appreciate that it is merely a small element at the moment and I would like to see it grow. However, he will forgive me if I do not start making commitments of that sort at the Dispatch Box—

[Paul Howell (Sedgefield) (Con)]

When we talk about NHS procurement and the challenges for small and medium-sized enterprises in dealing with the NHS, we are talking about small companies dealing with a vast organisation. PolyPhotonix, a company in my constituency, gave me an example of the frustration involved. It created a light therapy mask to help treat diabetic retinopathy, and I have been supporting the company. The NHS procurement process has been extremely complex, although the company got the mask approved. There was NHS investment in innovation to develop it, but it became used in the private sector before the NHS, because the NHS procurement could not get it right or could not make the approvals. Those were finally obtained and the mask is now active, fabulous and a great product. The other NHS trusts all want to approve it themselves, so surely there is an opportunity here. If something is approved by one NHS trust, surely it does not need to be approved by every other one before it can be used. Is there some opportunity in the Bill to facilitate that greater ease for SMEs?

[Jeremy Quin]

I recognise the frustration of the company in my hon. Friend’s constituency. He should take up the specifics of that with my right hon. Friend the Health Secretary, but more generally he raises an extremely valuable point, not just in the health sector, but more broadly, about the ease of doing business with Government for SMEs. The Bill contains a range of measures on this: it puts a duty on procurers to ensure that they are considering the specific needs of SMEs; it ensures there is a 30-day payment period; it ensures that pipelines are put out well in advance; it says, “You don’t need to be insured to do the job before you have won it”; and, above all, it provides for one entry point and allows companies to set out in one place what they are as a smaller company before they even start thinking about the tender they are applying for. All those are incredibly valuable components to make it easier for an SME to thrive.

[Bill Esterson]

rose—

[Jeremy Quin]

I will not give way at this stage. I thank the hon. Gentleman for the offer, but I think I should be making a little more progress.

In delivering value for money, the Bill will require procurement teams to take account of national priorities, as set out in a new national procurement policy statement. These are national priorities such as improving supply chain resilience, enhancing skills, driving innovation and, of course, protecting the environment. Procurers will be able to give greater weight to bids that support such priorities. I know that in the other place there is a strong desire to pursue particular interests and include a range of policies in the Bill. The Government instead believe that that is a purpose of the NPPS. We want to keep this legislation as clear and simple as possible; the intention is that we allow procurement to keep pace with evolving policy priorities and we do not swamp contractors and SMEs in paperwork.

The Bill will accelerate spending with small businesses. New duties will require contracting authorities to have regard to SME participation. Public sector buyers will have to look at how they can remove bureaucratic barriers and level the playing field for smaller businesses. Commercial frameworks will be made more flexible, with the new concept of an open framework, which will allow for longer-term frameworks that are reopened at set points, so that small and emergent businesses are not shut out for long periods. These measures build on existing policy, which allows procurers to reserve competitions for contracts below the thresholds for SMEs and social enterprises based in the UK, taking full advantage of the new freedoms following our exit from the EU.

We are determined to improve the prompt payment of small businesses in our supply chains. As I have mentioned, 30-day payment terms will apply contractually throughout the public sector supply chains and be implied into the contract, even when not specifically set out. The Bill provides for new improved procedures for the award of public contracts, supported by greater flexibility. Buyers will be able to design procurement processes that are fit for purpose and will create more opportunities to negotiate with suppliers so that the public sector can work in partnership with the private.

We will also take tougher action on underperforming suppliers.

[Stephen Kinnock (Aberavon) (Lab)]

On partnership between the public and private sectors, the steel industry is a crucial aspect of that. Does the Minister agree that the Government should be looking to set indicative targets for the amount of domestically produced steel that we are putting into Government-funded projects? That would enable us as a country to make, buy and sell more in this country, which should surely be a strategic objective of the Bill.

[Jeremy Quin]

The hon. Gentleman treads a well-trodden path. Through steel procurement, we are always keen to set out the pipeline and provide every assistance we can to the domestic steel industry. However, as he knows, there are also international obligations, of which we are mindful and I know he will also be mindful, in respect of how we conduct our public procurement. I am not certain whether what he suggests would be consistent with the Government procurement agreement. [Interruption.] On pipelines, we are doing everything we can to help the domestic steel industry see the opportunities ahead of it and engage with public procurement. This is something we definitely and warmly appreciate.

We will also take tougher action on underperforming suppliers or those who present risks through misconduct. The Bill puts in place a new exclusions framework that will make it easier to exclude suppliers that have underperformed on other contracts. Through the Bill, I am pleased to say that we are targeting those who benefit from the appalling practice of modern slavery and, in doing so, undermine our own industrial resilience. The Bill makes explicit provision to disregard bids from suppliers known to have used forced labour or to perpetuate modern slavery in their supply chain. Contracting authorities will now be able to exclude suppliers where there is appropriate evidence of wrongdoing, whether in the UK or overseas.

[Debbie Abrahams]

I wholeheartedly support the Minister on that. I want to take him back to a previous point about late payments and the 30-day term. How will the Government monitor those and ensure adherence? Will that be done through audited accounts? What will be the punishment if there is not adherence?

[Jeremy Quin]

Ultimately, this is contractual. On the prime, that is easy: we will be paying the prime contractor within the 30-day period. People in the supply chain will be aware of the contract under which they are supplying to the prime, and we expect that 30-day payment to trickle all the way down the chain. It is the first time that such a measure has been incorporated. It really will be for primes to be held to account. I say to hon. Members of this House that if partners to a contract are not being paid without good cause, it will call into doubt the contract with the prime supplier, so it will be very much in the interest of the prime supplier to deliver. Every effort the Government have made to improve the payment terms through the supply chains has so far been adhered to pretty well by industry. Across Government, we have seen a significant improvement in payments out to industry, and we are expecting a ripple-down effect as a result of the Bill.

We will also create a new debarment list, accessible to all public sector organisations, which will list suppliers who must or may be excluded from contracts. This approach will ensure the high standards that we expect in the conduct of suppliers who benefit from public money. Embedded in the Bill is our commitment to creating an open and transparent system. Everyone will have access to public procurement data: citizens will be able to scrutinise spend against contracts; suppliers will be able to see the pipeline of upcoming contracts so that they can identify new opportunities and develop innovative solutions; and buyers will be able to analyse the market and benchmark their performance against others on, for example, their spend with small and medium-sized enterprises.

The Bill contains key provisions to enable these new levels of transparency, along with the statutory obligation on the Government to deliver a single digital platform to host this data. The Bill will strengthen existing obligations on contracting authorities to identify and mitigate the conflicts of interest in procurement decision making. These new requirements will ensure that conflicts of interest are managed transparently and in such a way that maintains the integrity of the public procurement regime. Additional safeguards include mitigations that may be required of suppliers by contracting authorities and for procurement teams to record and maintain a written assessment of conflicts.

In common with all procurement regimes, provision is made in the Bill for direct awards in a limited number of special circumstances—for example where extreme urgency means that there is no time to run a competition. Ministers will now be able to make provision for contracts required in a rare emergency event when action is necessary to protect life or public safety. This must be kept under review, revoked when no longer necessary, and is subject to the necessary parliamentary scrutiny in both Houses through the affirmative procedure. The Bill also requires that, before a contracting authority directly awards a public contract using any such regulations, a transparency notice must be published. These are major safeguards that did not previously exist.

The Bill fully honours implementation of our international trade agreements, including the World Trade Organisation agreement on Government procurement, which provides UK businesses with access to procurement opportunities collectively worth an estimated £1.3 trillion per annum.

[Sir James Duddridge (Rochford and Southend East) (Con)]

The Minister mentions trade deals. Both the Australia and New Zealand trade deals have a large procurement element. That will fall away if the Bill becomes an Act. I note that the Trade (Australia and New Zealand) Bill has not yet received Second Reading in the other place. May I urge him to hold discussions with business managers with a view to manipulating things so that we get Royal Assent for this Bill rather than for the Trade (Australia and New Zealand) Bill to avoid the very small problem—a problem of just a few weeks—of trade deals being done within a new set of rules that will very quickly become obsolete?

[Jeremy Quin]

I thank my hon. Friend for a most ingenious comment. I had not considered the calendar of the two Bills. It is an interesting point. I will raise the matter with business managers.

We will continue to support UK businesses so that they can continue to be successful in competing for public contracts in other countries around the world by protecting reciprocal arrangements and guaranteeing market access, treating each other’s suppliers on an equal and fair footing.

Turning finally to territorial application, we have prepared the Bill in a spirit of co-operation between the nations of the United Kingdom. As part of the policy development process, we welcomed policy officials from Wales and Northern Ireland into our team so that they had a critical role in shaping this legislation from the very beginning. As a result, the general scope of the legislation applies to all contracting authorities in England, Wales and Northern Ireland. This will ensure that contracting authorities and suppliers can benefit from the efficiencies of having a broadly consistent regime operating across constituent parts of the UK.

I regret to say that the Scottish Government have opted not to join the UK Government Bill and will retain their own procurement regulations in respect of devolved Scottish authorities. Many in the House will regret that and would no doubt welcome our Scottish friends joining the new regime, which will benefit taxpayers and public services alike across Scotland and the whole of the UK.

There has never been a piece of UK procurement legislation as comprehensive as this. It is a large and technical Bill. I accept that there may be some areas that will merit further consideration, which we will debate in more detail in Committee, but I am confident that these significant reforms open up a new chapter for public procurement in this country and will boost business, spread opportunity and strengthen our Union. I urge all Members of this House to support the Bill.

[Madam Deputy Speaker (Dame Rosie Winterton)]

Before I call the Opposition Front-Bench spokesperson, I wish to draw colleagues’ attention to the fact that, while we are not desperately pushed for time, there is quite a lot of interest in this debate, so my recommendation for Back-Bench speeches is about eight minutes. We also have a maiden speech. If Members follow my recommendation, I will not need to impose a time limit. I call the Deputy Leader of the Opposition.

--- Later in debate ---

[Angela Rayner]

I absolutely agree with my hon. Friend. As he says, using public money to make, buy and sell more in Britain can also be achieved through our defence spending and by spending on steel and vital infrastructure in the UK. As the party of working people and trade unions, we in Labour know that, when done well, defence procurement strengthens our UK economy and our UK sovereignty, but this Bill fails to direct British defence investment first to British business, with no higher bar set for any decision to buy abroad.

Labour wants to see our equipment designed and built here. That means our national assets, such as the steel industry, our shipyards and our aerospace. That is fundamental for Labour, and we will amend the legislation to secure it. My right hon. Friend the Member for Wentworth and Dearne (John Healey), the shadow Defence Secretary, made it clear that that is a priority for Labour, when he announced at our conference in September that Labour in government would build the navy’s new support ships in Britain.

As my right hon. Friend the Member for Warley (John Spellar) mentioned, the Conservatives announced that the £1.6 billion fleet solid support ship contract would be awarded to Spanish shipbuilders, meaning at least 40% of the value of the work will go abroad. Ministers have confirmed that there is no limit on how many jobs will be created in Spain and that there are no targets for UK steel in the contract. That is frankly a disgrace and a wasted opportunity, when the use of procurement could have been a force for strengthening our UK economy and our security at the same time.

I hope the Minister is listening and will openly work constructively with me to amend the Bill and ensure that British defence investment is directed first to British industry, as well as carrying out a review of the contract for fleet solid support ships.

[Jeremy Quin]

I hope the right hon. Lady will welcome the fact that, as a result of the FFS award, we will see revitalisation of Harland & Wolff, we will have additional shipyard capacity and we will be rebuilding the British shipyards left in a dreadful state after the last Labour Government. We are seizing opportunities. It is unfortunate that we have to reskill some of our workers and that we have to use opportunities coming from abroad to ensure that we recreate another yard in the UK as well as supporting Appledore, but it is important that we have the right equipment for our armed forces and that defence can seize those opportunities.

[Angela Rayner]

I thank the Minister for that contribution, but he should put it in the Bill. He should work with us to ensure that we build in Britain and support British industry and the steel industry. We discussed earlier today the difficulties that UK industries face, and I believe this Bill does not go far enough to support our industries. I want to see that support and I will happily work with the Minister on that.

The Minister has also pledged to use this Bill to make procurement quicker, simpler and more transparent. We need look no further than the pandemic for the clearest example of why we desperately need a more agile and transparent procurement system. The Tory VIP lane exposed the true weakness in the system, enabling the shameful waste of taxpayers’ money and profiteering by unfit and unqualified providers.

As a result, the Government have written off £10 billion of public funds spent on unusable, overpriced and undelivered personal protective equipment. More than £700,000 a day of taxpayers’ cash is currently being used to store unused gloves, goggles and gowns—enough to pay for 75,000 spaces in after-school clubs or 19,000 places in full-time nursery care.

I am still waiting to see whether the Government will respond to our Humble Address and come clean about the murky case of PPE Medpro, which saw £203 million handed to a company with links to a Tory politician. Will the Minister use this opportunity to confirm whether his Government are still procuring PPE or other goods using the emergency rules enacted during the pandemic?

There is no doubt the pandemic presented a unique situation, placing huge strains on our procurement processes but, while all countries faced similar pressures and shortages, many countries conducted their emergency procurement in a far more open, effective and cost-efficient manner. The Government must learn the lessons of those mistakes, and what better opportunity than within this Procurement Bill?

I wait with anticipation to see how the Government might go about shutting down the VIP lanes, tightening the leash on Ministers’ freedom to award contracts directly and hard-wiring transparency into the system. Instead of straining every sinew to root out waste and cronyism, the Minister is pushing a Procurement Bill that would allow the same mess to happen all over again—handing more power over direct awards to Ministers, not less. I am sure the Tory party’s cronies watching these proceedings will be rubbing their hands with glee at a Bill that puts their VIP fast lane on to the British statute book. I am also sure that former Ministers from previous Conservative Governments, who grasped the opportunity to do the right thing and clean up politics after years of sleaze, will be disappointed by this Bill.

[Angela Rayner]

Yes. Clause 41 allows Ministers to use urgency as a new justification for granting direct awards—directly allowing the VIP lane yet again. I ask the hon. Gentleman to look at the Bill and at exactly what that would mean for the future of our procurement. I am sure Government Members, including Ministers, will be disgusted at the billions of pounds that we have seen wasted through that process. I am willing to work with the Government to identify and close those loopholes.

[Jeremy Quin]

If life and public safety are at risk, does the right hon. Lady really think that there should not be an urgent procurement procedure—particularly one approved by this House—in that situation?

Procurement Bill [Lords]

Jeremy Quin Excerpts

Report stage
Tuesday 13th June 2023 Commons Chamber

[The Minister for the Cabinet Office and Paymaster General (Jeremy Quin)]

I beg to move, That the Bill be now read the Third time.

I stand here today proud of the progress we have made to deliver an important manifesto commitment. The Procurement Bill constitutes a vital piece of legislation following our exit from the European Union, which allows us to set our own rules that will work best for the UK. I am delighted to say that we will sweep away bureaucratic regulations and broaden opportunity to small businesses right across the country.

One in every £3 of public money, some £300 billion a year, is spent on public procurement. For too long, modern and innovative approaches to public procurement have been bogged down in bureaucracy. We are changing that. The Bill simplifies our public procurement rules, cutting down the 350 different procurement regulations to create a single rulebook. This will create a more efficient, innovative and friendly procurement system, increasing value for money and opening up public contracts to small businesses, in turn supporting the Prime Minister’s commitment to grow the economy.

[Debbie Abrahams]

Will the Minister give way?

[Jeremy Quin]

I keep promising my colleagues that I will be brief, but I will always give way to the hon. Lady.

[Debbie Abrahams]

The Minister is being very generous with his time. He will not be surprised by my question. I was a little disappointed that my new clause 12, on introducing and mandating project bank accounts, was disregarded. I mentioned the estimate that 6,000 small construction firms will go into insolvency this year. What is the Department’s analysis of how that might be prevented by project bank accounts?

[Jeremy Quin]

I am sure I could try to produce a one-hour solution, or I could be more direct with the hon. Lady. I know she has raised this issue on numerous occasions, but she and I have not spoken about it one-on-one. If she wishes to speak to me about it, we could have a meeting, if that would help. I might learn something from it or I might be able to inform the hon. Lady, but if she wishes to do that, I will make certain that we have that opportunity.

[Sir Bill Wiggin (North Herefordshire) (Con)]

On that point, will my right hon. Friend give way?

[Jeremy Quin]

I will also have a meeting with my hon. Friend, if he wishes.

[Sir Bill Wiggin]

Construction businesses are terribly important. If the Government could do something about the ban on building, for example because of pollution in the River Wye, then those construction businesses would find new opportunities and would flourish.

[Jeremy Quin]

My hon. Friend is vociferous on the issue of the River Wye. He never misses an opportunity and has proved his dexterousness yet again, in doing so in this debate.

We, on the Government Benches, are proud to be the party of small business. I am delighted that, as part of this Bill, authorities will now have to have regard to small and medium-sized enterprises and the barriers that they face.

Finally, the Bill will put in place a new exclusions framework that will help to make it easier to reject bids from suppliers whose performance on previous contracts has been unacceptable, or who have been involved in serious wrongdoing, such as fraud, collusion or modern slavery. Crucially, on Report, we introduced a package of vital amendments that will protect our national security and ensure that public contracts do not go to suppliers who pose a risk to our country.

We will also create the national security unit for procurement, which will proactively investigate suppliers for national security threats, and we will publish, within six months of the passing of the Bill, a timeline for the removal of all the surveillance equipment provided by suppliers subject to the national intelligence law of China from sensitive Government sites, protecting places that are most vulnerable to sinister interference and espionage. Together, these changes constitute robust protections against the ever increasing national security threats.

I would like to take this opportunity to thank all hon. Members across the House for the quality of the debates and the scrutiny provided throughout the passage of the Bill. I am indebted to my hon. Friends and to those across the House for the helpful engagement and the comments they have made, which have undoubtedly refined this crucial piece of legislation.

I am particularly grateful to my hon. Friend the Member for Brentwood and Ongar (Alex Burghart) for his excellent work on Committee and on Report in this House, and to Baroness Neville-Rolfe for her tireless work in the other place. The Bill has had a long progression, so I would also like to thank our predecessors, Lord Agnew and my right hon. Friend the Member for North East Somerset (Sir Jacob Rees-Mogg), for their work on the Bill in its earlier stages.

I thank the officials who have worked on this Bill, particularly the Bill manager, Katrina Gayevska, Sam Rowbury, Ed Green, Janet Lewis and other officials who worked on this legislation, as well as the staff in the private offices of all the Ministers in the Cabinet Office, for their support and help throughout.

When he entered office, the Prime Minister said that he would deliver on the manifesto on which we were elected. I am proud today to be doing just that, and I wholeheartedly commend the Bill to the House.

[Madam Deputy Speaker (Dame Rosie Winterton)]

I call the Deputy Leader of the Opposition.

[Angela Rayner (Ashton-under-Lyne) (Lab)]

I start where the right hon. Member for Horsham (Jeremy Quin) left off, by saying thank you to all right hon. and hon. Members who have spoken today, in particular my hon. Friend the Member for Vauxhall (Florence Eshalomi) for her contributions throughout the stages of the Bill. I also thank the brilliant Clerks and the House staff, and everyone who has been involved and on hand to support every step of the Bill.

It has been a long and complex process, and I know the Cabinet Office has been very busy in recent weeks, so I welcome the opportunity to debate something of more substance today. Unfortunately, the substance of the Bill, while necessary, is a little bit of tinkering around the edges of a broken system. I understand the need for a new Procurement Bill, to consolidate the patchwork of former EU rules and to bring the spaghetti of procurement regulations into one place, but it seems this distracted Government are more concerned with the civil war than writing good legislation.

Britain faces huge economic challenges—challenges made worse by years of economic incompetence, a disastrous kamikaze Budget and a Government on the side of vested interests. Wages have flatlined, prosperity has turned to stagnation and Britain has the highest forecast inflation in the G7. Procurement is one of the biggest and most effective tools available to Government to drive up standards across the economy and create world-class, affordable and effective public services.

As the Minister said in his response, we are talking about £300 billion of public money a year, a third of public spending and more than the NHS budget. What we should be debating this evening is a bold new set of rules to direct investment to the places that need it most. We should be discussing how we can clear the pipes and flush out the system with transparency after years of cronyism and waste. We should be debating legislation that pumps money back into the pockets of local communities, creates decent jobs and skills in our towns and cities, and hands wealth back to the people who built Britain.

Instead, what we have before us today is a damp squib. This Bill fails to close the loopholes that saw obscene waste of taxpayers’ money through the VIP lane, it fails to mandate social value to secure investment in good British business, and it fails to create robust protections for workers. Labour recognises the need for a new procurement Bill, and for that reason we will not oppose this one, but surely we can do better than this.

This evening the Government chose to vote against a Labour amendment that would have blocked VIP lanes, for the third time. They have had three opportunities to show that they have learnt from the waste and the cronyism that we saw during the pandemic, and on all three occasions they have refused. In fact, loopholes included in this Bill will make it easier for Ministers to bypass existing transparency rules. The Tory VIP lane is at the heart of why we need a procurement Bill. It exposed the true weaknesses in the system and showed us why we desperately need a more agile and transparent procurement system.

[Jeremy Quin]

It is a bit late in our proceedings, but I really would encourage the right hon. Lady to read the Bill, even at this late stage.

[Angela Rayner]

I think the Minister knows full well that I have read the Bill, and it is a real shame that in the conversations that my hon. Friend the Member for Vauxhall and I have had with him and his team, they have refused to help stop this loophole. The Tory cronyism on the VIP lane is still there in this legislation. The VIP lane enabled a shameful waste of taxpayers’ money and profiteering by unfit and unqualified providers, and as a result the Government have written off £10 billion of public funds spent on personal protective equipment that was unusable, overpriced or undelivered.

While I welcome the moves in the Bill to issue “transparency notices” before awarding a contract, these are just baby steps; they barely scratch the surface. We must see end-to-end transparency. And it is not just me who thinks that. The amendment that the Government voted down today is a proposal by the National Audit Office, a totally independent body calling for the Government to end their murky practices that saw taxpayers’ money wasted at eye-watering rates.

This Bill also gave us an opportunity to reimagine the way we spend public money in order to promote decent work across the economy, to reward businesses that treat their workers right, and to use procurement to raise the floor on working conditions for all. Any suppliers given taxpayers’ money should provide their workers with decent pay, respect, dignity and fairness, as well as access to a trade union. Economies across the world expect that from their employers. In France, Germany and the Netherlands, for example, more collective bargaining, stronger workers’ rights and a fair share of wealth lead to higher growth, productivity and staff retention. President Biden’s Government direct investment to companies with a track record of treating their workers with respect, so why can’t we?

But over the last 13 years, the Tories have failed to use the levers of government to drive up standards for working people. In fact, things have got worse. I am disappointed but not surprised that the Government today voted down our amendment, which would have held suppliers to account when they repeatedly abuse workers’ rights. Taxpayers do not expect their money to be handed to suppliers with a track record like that. They want to see their money going to suppliers who pay their staff properly and who uphold fair conditions, job security and union access. That is the bare minimum.

I also want to take this moment to welcome the Government’s last-minute amendments on national security. I could not help but recognise some of those amendments. I would also like to pay tribute to the hon. Member for Rutland and Melton (Alicia Kearns), whom I worked closely with to highlight the need for change in managing the risk in procurement. I welcome the Minister’s recognition that the current system leaves the door open for foreign threats to enter our supply chain and for taxpayers’ money to be spent with no oversight on whether they are properly vetted. That said, I hope the Minister can tell us what criteria his Government will use to identify suppliers who pose a risk to national security, and I hope he will consider the inclusion of cyber-security criteria in that assessment.

In closing, I would like to once again thank all hon. and right hon. Members for their contributions today. While procurement might seem a dry topic, it is absolutely central to the way that our country works, and when Ministers abuse the procurement system, it is taxpayers who suffer. As we saw during the pandemic, the VIP lane for PPE contracts was a scandal of epic proportions that allowed the shameful waste of taxpayers’ money and inexcusable profiteering, yet instead of learning the lessons of this failure, this evening Ministers voted for a third time to protect the loophole that allows the VIP lanes to exist. The Government have a duty to learn the lessons from the pandemic and, quite frankly, Ministers have abdicated that duty here today. While the Tories are too distracted to govern, Labour in power would flush cronyism out of the system and protect taxpayers, to ensure that every pound is spent in the national interest.

Question put and agreed to.

Bill accordingly read the Third time and passed, with amendments.

Energy Bill [Lords]: Ways and Means

Resolved,

That, for the purposes of any Act resulting from the Energy Bill [Lords], it is expedient to authorise—

(1) the imposition, by virtue of the Act, of charges or payments under licences issued under the Gas Act 1986;

(2) the making of provision under the Act requiring electricity suppliers to make payments, or to provide financial collateral, to the Secretary of State;

(3) the making of provision under the Act in relation to income tax, corporation tax, capital gains tax, stamp duty, stamp duty reserve tax, stamp duty land tax or value added tax in connection with a transfer of property, rights or liabilities by a scheme under the Act.—(Andrew Bowie.)

Electronic Trade Documents Bill [Lords]: Second Reading

Motion made, and Question put forthwith (Standing Order Nos. 59(3) and 90(5)), That the Bill be now read a Second time.

Question agreed to.

Bill accordingly read a Second time; to stand committed to a Public Bill Committee (Standing Order No. 63).

Electronic Trade Documents Bill [Lords] Committee

Ordered,

That the Electronic Trade Documents Bill [Lords] Committee shall have leave to sit twice on the first day on which it shall meet.—(Robert Largan.)