Procurement Bill [ Lords ] (Fifth sitting)

Kirsty Blackman Excerpts

Committee stage
Tuesday 7th February 2023 Public Bill Committees

Division 18

Ayes: 5

Noes: 9

[Kirsty Blackman (Aberdeen North) (SNP)]

I beg to move amendment 103, in clause 41, page 29, line 10, at end insert—

“(5A) Where a direct award justification applies, before making a direct award to a supplier a contracting authority must satisfy itself that no preferential treatment has been conferred on the supplier by virtue of any recommendation made by a Member of the House of Commons or the House of Lords.”

[The Chair]

With this it will be convenient to discuss the following:

Amendment 104, in clause 44, page 30, line 23, at end insert—

“(c) any connections between the supplier and any—

(i) registered political party,

(ii) Ministers of the Crown, or

(iii) Members of the House of Commons or House of Lords

where such connections are of a nature likely to be relevant to the direct award of the contract.”

Amendment 111, in clause 44, page 30, line 25, at end insert—

“(4) Any Minister, peer or senior civil servant involved in recommending a supplier for a contract under section 41 or 43 must make a public declaration to the Cabinet Office of any private interest in that supplier within 5 working days.”

This amendment would implement the recommendation of the National Audit Office that any contracts awarded under emergency provisions or direct awards should include transparency declarations.

[Kirsty Blackman]

These amendments arise mostly, although not entirely, as a result of what happened with PPE during covid. I would be less inclined to move the amendments if the Government had shown any contrition about the situation we find ourselves in. They tend to stand up and say, “Well, we needed to procure things in a rush, so we have no regrets about the situation.” It would be much better for them to stand up and say, “We needed to procure in a rush, but lots of mistakes were made along the way and therefore we believe that we need to do better next time.” A full investigation would also be helpful.

The situation we find ourselves in is this: a significant amount of PPE, of significant value, was unusable; the VIP lane has been considered unlawful; and those who made recommendations—one person, certainly, who made a recommendation—have personally benefited from Government contracts that were awarded. In the light of that situation, it is incredibly important that the procurement rules we set up ensure that such a situation cannot happen again—that there is both a requirement for the people making direct awards to satisfy themselves that no preferential treatment has been given on the basis that the person has been recommended by a Member of the House of Commons or the House of Lords, and that, should there be any connections between the supplier and a registered political party, Ministers of the Crown or Members of the House of Commons or House of Lords, that information is laid out in the transparency notice.

That is not asking too much. We all have a register of interests that we are supposed to keep up to date—the ministerial one slightly less often, or very much less often, than that for MPs. Asking for a higher level of transparency, when we know that those links occur, is not asking too much.

The Conservatives have a tendency to point to the fact that, “Well, we have people in the House of Lords who have come from business, therefore of course they will continue to have business interests.” I am not suggesting that they should not—that is absolutely fine—but we should be transparent about it and we should know if a contract has been granted to somebody who will benefit as a Member of the House of Lords. Is the supplier, or the person receiving the procurement contract—the beneficial owner—a peer or a Member of the House of Commons? Are they linked, in some way, to a political party?

We know from Sky’s investigation that a number of Members of Parliament receive money from companies. That is registered, but there is no requirement in the Bill, as it stands, for it to be noted; there is no requirement, when the contract is being given, for that which is open and registered already. Members of Parliament have to register if they receive a certain amount of money from a company, so it should follow that, if the company is being given a procurement contract, it is registered as part of the transparency notice. That should be noted up front.

That is not asking too much, particularly in relation to amendment 104, which is specifically about transparency notices and ensuring that that stuff is clear. It should not be too much work for anyone doing the transparency notice. Absolutely, it will create a little bit of extra work, but all they will need to do is cross-reference the registered interests, and then put that in the transparency notice so that we are all aware of the links.

[Lloyd Russell-Moyle]

The hon. Lady is raising some important points about how mistakes were made during the covid period. It is important to note, however, that those same mistakes were not made in Labour-controlled Wales or SNP-controlled Scotland, where transparency seemed to be much higher and fast-track schemes were not implemented. Is there a case for greater light to be shone in this place, where the rot seems to have truly set in?

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[Kirsty Blackman]

I absolutely agree. In fact, that adds to the case that we should be willing for there to be an investigation. It shows that, actually, we can do it right and in such a way that individuals do not benefit from that.

[David Duguid (Banff and Buchan) (Con)]

I thank the hon. Member for giving way. I look forward to her supporting Scottish Conservative calls for transparency on certain procurements—of ferries and suchlike—by the Scottish Government.

The hon. Member said that it should not be too much to ask. I have heard that argument many times about making amendments, not just to this Bill but to others. She said herself that the registers of Members’ and Ministers’ interests already exist. Does she not feel that making “shouldn’t be too much to ask” amendments to any Bill risks diluting its effect?

[Kirsty Blackman]

I do not think that that is the case. We should not have such an issue that we need journalists, such as those at Sky, to shine a light and make those links. There should be a requirement for that transparency to be in place. Although we have the registers of Members’ and Ministers’ interests, they stand alone and are separate from the procurement contracts. If we end up in situations where people are benefiting significantly, having that in the transparency notice is important.

[Florence Eshalomi]

The hon. Member makes a valid point. Does she agree with my concern that only the other week the Paymaster General said that Ministers’ interests will be updated, but not until May, whereas we as Members have to update our entry in the Register of Members’ Financial Interests within 28 days? Why the delay?

[Kirsty Blackman]

I absolutely agree. The former Chancellor and chairman of the Conservative party, the right hon. Member for Stratford-on-Avon (Nadhim Zahawi), did not update his list of ministerial interests for a significant period after he was put into his role. In fact, some of the most egregious issues did not come to light properly until he updated the list of ministerial interests in January, some three months after he became the party chairman.

I agree that the lack of transparency is a significant issue, and I was disappointed in the Government responses. They do not seem keen to move on the register of ministerial interests being updated more regularly. Surely, given the amount of Executive power in this place and the post-Brexit creep towards increasing the amount of ministerial or Executive power—taking power away from Members—it is even more important for ministerial interests to be registered.

[Lloyd Russell-Moyle]

Does the hon. Member agree that the proposal would be in the interests of a governing party that is facing so many scandals—from Baroness Mone to the Randox lobbying affair—that have almost brought down Prime Ministers? It would help to protect the Conservative party from some “bad apples”, as Conservatives might put it.

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[Kirsty Blackman]

I agree and would add to that: how many former treasurers of the Conservative party who have given significant amounts to the party have just happened to end up in the House of Lords? Who knows how that has happened? We know that there are people in this House and in the other place with significant business interests, and the amendment is not a criticism of that; it is not a negative thing, but it is about ensuring transparency.

[Chris Evans (Islwyn) (Lab/Co-op)]

The nub of the issue is that people have been appointed to the House of Lords and, in a particular case—I do not want to mention the name—they are not then taking an active part in proceedings in the other place. We could mention a number of peers who have hardly spoken since they were appointed, or not spoken at all. Rather than using that position to serve the Executive of this country, they have used it to lobby for contracts from the Government. That needs to be stamped out. Does the hon. Member agree that it is now time to look at how we appoint people to the Lords, and perhaps remove appointment to the Lords from the honours system altogether?

[Kirsty Blackman]

I absolutely agree. Each former Prime Minister is able to put forward whoever they want to the House of Lords, so we end up in this situation of having 850 peers and counting. The numbers are increasing drastically because the Government keep putting in more people to balance the politics in that place.

On the amendment, it is important for the Government to be willing to consider how best to improve transparency. So far, they have shown no willingness to improve transparency or to accept that there have been issues and that mistakes have been made. We need to change the system.

The UK has fallen in Transparency International’s corruption index, which has nothing to do with the Financial Action Task Force one. The FATF index is about corruption when it comes to money laundering, but Transparency International’s is about corruption in the public sector. It looks specifically at such issues as breaches of the ministerial code—in particular, ones that have not been investigated—and the scandals we have seen and continue to see.

The Prime Minister cannot keep sacking people who breach the code; we need to change the system so that they never get to that position in the first place—so that they can never commit the egregious breaches of trust we have seen and can never profit as individuals as a result of their position in this place or the other place. If the rules and systems are changed—which they clearly need to be—the Prime Minister will not need to sack people, because they will never be able to breach the rules and will never be able to profit as individuals simply as a result of their links to this place.

I will push amendments 103 and 104 to a vote when we come to that point and am happy to support amendment 111, tabled by the Labour Front-Bench team.

[Florence Eshalomi]

We fully support amendments 103 and 104, tabled by the hon. Member for Aberdeen North, which consider how we embed transparency into the system of direct awards. The two amendments highlight why we need additional layers of scrutiny to address glaring areas of conflict of interest in respect of Members of both the Commons and the Lords. It is vital to have additional checks in place.

Throughout the proceedings on the Bill the Minister has talked about the principle of impartiality, and said that the Bill will make VIP lanes, such as those we have seen, illegal and that it is all going to be fine. But that is just not the case. We need only to look at the pandemic to see why we desperately need to make sure that our procurement system is more agile and more transparent. The Tory VIP lane exposed a weakness in the system.

We must remember that we are talking about taxpayers’ money. We are at a time when so many people are feeling real difficulty in their choices and are seeing their household incomes reduce. Council and social housing tenants dread their rents going up. A number of councils have already highlighted how they are going to increase their council tax, including a borough in south London that is proposing to increase council tax by 15%.

Taxpayers’ money was wasted on contracts that were not fit for purpose and wasted as profits for unqualified providers. Worryingly, the Government have written off £10 billion of public funds that were spent on PPE that was either unusable, overpriced or undelivered, and it is worth bearing in mind that we are still spending £700,000 of taxpayers’ money a day on storing unused gloves, goggles and gowns. That money could pay for spaces in after-school clubs. It could pay for 19,000 full-time nursery places. It is public money.

The Bill does not pass the Mone or Paterson test; that waste could still be allowed to happen, over and over again. Handing more power to Ministers in respect of direct awards is not the way we want to go. We support the two amendments, because it is important that we empower local authorities to be able to ask the necessary questions when it comes to conflicts of interest. The current procurement system is not working, and we need to include new checks.

The amendments could be further strengthened by placing the onus on individual Ministers, civil servants and special advisers to make the necessary declarations but, as we have seen, when the onus is on them, they still do not make those declarations. Essentially, they have to be dragged kicking and screaming. We are in a situation in which we will not see the declarations of Ministers’ financial interests updated until May, if we are lucky. Anything could happen before May.

I draw the Committee’s attention to amendment 111, which we think further addresses the aims of amendments 103 and 104. We have an opportunity to learn from past mistakes and to tighten the freedom of Ministers to award direct contracts. It is about hardwiring transparency into our system. That should be a good thing and something we should all support. Instead, it seems the Minister wants to continue to have a back door and a VIP entrance. We must be clear that the Bill offers us a chance to clear that up.

The facts and figures speak for themselves. Some £3.4 billion of taxpayers’ money, in the form of contracts, went to Conservative donors and friends. A former Conservative Minister lobbied for Randox, which then provided 750,000 defective tests that had to be recalled, all while he was being paid £100,000 on top of his salary. Globus (Shetland), a business that has donated £400,000 to the Conservative Party since 2016, received £94 million-worth of PPE contracts.

Millions of people struggled during covid-19. The Government did some good things—including the furlough scheme to help people not to lose their jobs and the support for businesses—but a large group of people missed out on any money, including the 3 million people who form ExcludedUK. For those people who paid their taxes, submitted their returns and did not receive any money to have seen contracts dished out to friends, when those contracts were not even viable, was a slap in the face. When millions of people struggled during covid-19, it was not fair for them to have seen friends and donors of the Tory party prosper. As it stands, the Bill would continue to allow that to happen.

Our amendment 111 takes an important step, with amendments 103 and 104, towards addressing the situation, by asking Ministers to act, ensure genuine transparency in the system and restore trust in public money. This is about trust in the system. A number of members of the public do not trust our system; this is about restoring some of that trust and ensuring that, after years of waste and mismanagement, we do not find ourselves in this situation again.

Our amendment is based on a proposal by the independent National Audit Office and would mandate that:

“Any Minister, peer or senior civil servant involved in recommending a supplier for a contract under section 41 or 43 must make a public declaration to the Cabinet Office of any private interest”.

I hope we all agree that that is a straightforward, pragmatic proposal. It is not about layers of bureaucracy for business; it is about layers of additional scrutiny on Ministers to help to give the public confidence that another PPE Medpro scandal will be stopped and that we will not see a situation in which handfuls of millions of pounds of public money are redundantly spent on equipment that we cannot use.

The three amendments would outlaw VIP lanes once and for all, ensuring that we stop corruption. They would introduce a timeframe for transparency around declarations so that we can have information about conflicts of interests, instead of it being drip fed through the media or journalists. They would ensure that these scandals are not allowed to build up gradually over months and continue the erosion of trust. I hope the Minister agrees that Members of Parliament and the Government should have nothing to hide. If there is nothing to hide, they should support these reasonable amendments, which will help us to clean up our procurement system.

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I agree that it is of the utmost importance to ensure that no supplier receives unfair advantage due to a private interest, whether related to a party, Minister, peer or civil servant. I reassure the Committee that the Bill is clear on that. Clause 81(3) states that if a conflict of interest puts a supplier at an unfair advantage, and if steps to mitigate cannot avoid that advantage, the supplier must be excluded. The Government are committed to managing conflicts of interest in all contracts, not just direct awards. We have demonstrated that in the strong provisions throughout the Bill. I respectfully request that the amendment be withdrawn.

[Kirsty Blackman]

I thank the Minister for his response. I would like to press the amendment to a vote.

Question put, That the amendment be made.