Public Procurement

Debate between Lord Spellar and Sarah Champion

Monday 13th May 2024 Commons Chamber

[John Spellar (Warley) (Lab)]

I would like to make a couple of observations before I get on to the main thrust of my argument.

First, I regard the regulations as a great missed opportunity. It is not that the actual regulations themselves are not acceptable—they are probably an improvement—but they do not deal with a whole number of core failures in public procurement in this country. We have just discussed the covid era. I had a firm in my constituency that produced safety apparel for the catering industry. It knew exactly how to produce gowns; it had skilled cutters and machinery. There was no way of getting through the bureaucracy, which of course had been subcontracted to Deloitte, which also got a massive cut out of it. There was a real failure to engage with industry and, as the hon. Member for Angus (Dave Doogan) pointed out, a failure to maintain the industrial base—although I would gently point out to my friend that procurement from the Scottish Administration has not always distinguished itself over recent years either.

The right hon. Member for Wokingham (Sir John Redwood) rightly pointed out that very often Government procurement policy deliberately moves against SMEs because it aggregates contracts, for example, for repairs and maintenance in defence. Instead of being done by local firms, they are aggregated into one large contract, which only the big national facilities companies are able to do. Of course, they subcontract out the work and we know—we have just had a considerable number of reports about defence accommodation—how woeful their record is on delivery. That is a further problem that, I regret, is not addressed in the document, or in the Minister’s rapidly delivered speech.

That is the point: there are no penalties for failure. Recently, the Defence Committee received a letter from the Defence Secretary saying he cannot, under Government procurement rules, take into account past performance in assessing a contract. Mr Deputy Speaker, if you give work to a builder, he bodges the job, he comes back and tenders with the lowest price and you are governed by Government procurement, you have to take that, even though you know the history is that he cannot do the job. We see that very much in IT contracts, where firms fail time and time and time again. It is a shame that the right hon. Member for Rayleigh and Wickford (Mr Francois) is not present because I am sure he could talk at length about a company that is, rightly, his bête noire in that regard.

There is a fundamental failure of philosophy at the heart of Government and the regulations do not address it. That is also why I think this is a missed opportunity. They are based on a philosophy and theory that do not relate to the real world. I intervened on the Minister to talk about trade deals and he went on about the United States being able to strike particular deals. The core of international trading relations—and a lot of it that deals with public procurement is mentioned in the document—is World Trade Organisation agreements. I accept that there has been a deep fundamental failing within the WTO, which was to admit China to the organisation and then not to insist that it followed its rules, until basically it became too big to fail and too big to take on. I accept that there was that failure. But every other major industrial country looks after its own, often very effectively.

We heard all this during the debates about the European Union. I used to have to say, both to Eurosceptics and to Euro-enthusiasts who were ascribing either our problems or our salvation to Brussels, that the problems were not fundamentally in Brussels—they were in Whitehall. I remember once saying to a senior civil servant—a good one, by the way—during an argument about an issue related to this that, if the British civil service had fought the corner of Britain as hard as its French, German, Italian and other counterparts fought theirs, the British public would have been much more content with the EU. The British undermined it because they would not be good Europeans: they would not behave like the rest of Europe.

Let us consider the issue of police vehicles, which I raise regularly in the House. If we go to Berlin, Paris or Rome, we see that all their police vehicles—apart from the Carabinieri Land Rovers—are made in their own countries. If there is free competition and a superior product is available at a better price, surely one country should dominate? Not a bit of it.

Another argument that we have regularly concerns the fleet solid support ships. The Government insist on putting the contract out to international competition, and the bulk of the ships will be built in northern Spain. When France and Italy decided to procure similar vessels, it was made very clear that they had better be built in yards in France and Italy.

[Sarah Champion]

My right hon. Friend is making a very good speech and I fully agree with what he is saying. One of the ways in which Europe manages to support its own industry is by applying weighting to social value, ascribing the highest value to the very act of providing jobs for local people. That is something that we could be doing.

[John Spellar]

It is true that the social weighting applied here is insufficient, but European countries also send a clear subliminal message to competitors, putting up, as it were, a sign saying “Just don’t bother.” When Germany did procure a design for naval vessels from Holland, the prerequisite was that they had to be built in German yards.