Procurement Bill [HL]

Lord Berkeley Excerpts

Committee stage
Monday 4th July 2022 Grand Committee

In my understanding, that is what “covered procurement” does. If it did not, Clause 12 would introduce a national covered procurement policy statement, but it does not and there is no such amendment. Clearly, the intention is to have two concepts running through the Bill: procurement, which is every kind of procurement, and covered procurement, which is above the threshold. I do not understand why that is necessary, but at least I think I see what is going on. If I am wrong, I am happy to be put right.

[Lord Berkeley (Lab)]

I found the explanation of the noble Lord, Lord Lansley, quite interesting, but whether he is correct, we will have to wait for the Minister’s response to find out.

My problem, as has been mentioned by my noble friend and the noble Lord, Lord Fox, is that of definitions and the lack of reasons for change. For me, procurement is the process of awarding a contract. We need to know the definition of what is a public contract—perhaps the noble Lord is right; perhaps he is not—and what is not. In Amendment 1, the only difference between procurement and covered procurement is the word “public”, as he said. Where is the definition of uncovered procurement, if you like? We need that, and we also need an explanation of all these amendments, but I shall not go on, because my noble friend has delivered a massive argument. She said she spent all weekend on this, but she is just scratching the surface—which is even more frightening.

At the end of Amendment 1, we get something called the “centralised procurement authority”, which seems to be the top level—perhaps they are very large contracts. Can the Minister give some examples of what kind of contracts will be covered by that? It states that that is a

“contracting authority that is in the business of carrying out procurement for or on behalf of, or for the purpose of the supply of goods, services or works to, other contracting authorities.”

We can all give examples of those, and I am sure we will come to them later, but it is important that we have a definition of “public” and of “procurement”, and of how that is different from awarding a contract. Procurement, to me, is a process. It starts with tendering and ends up with, you hope, an award of contract. Why all these changes? There needs to be a definition and explanation against each one.

I will say just one more thing, because I am sure that everyone else will have spent the weekend going through each of these amendments. Amendment 440, which a noble Lord—I cannot remember who—just mentioned, refers to

“a supplier’s association with a state”.

“State” is an interesting word. What is a state? Is it Scotland or Wales? My noble friend next to me will have views on Wales but there needs to be a definition of “a state”. It suddenly pops up in Amendment 440. Presumably, if it means separate states, such as Wales and England, there will be frontiers between the two to make sure that goods go in the right direction.

I wanted to cover those two small issues, and want explanations from the Minister. I end by wishing the Minister well in taking the Bill forward. Noble Lords who have already spoken, in particular my noble friend Lady Hayman, have done a magnificent job but we are probably going to have several weeks of going through each of these amendments and asking the questions that she so rightly asked.

[Lord Wigley (PC)]

My Lords, I will speak briefly, as I intervened on the Minister’s opening speech. I want to reinforce the points that have been made and perhaps add a little to them.

I come to this from the viewpoint of the Welsh Government, who have worked closely with the UK Government on this matter over a period of time; designated civil servants from the Welsh Government have been co-operating on it. Therefore, this is not a matter of contention in that way; it is a question of making sure that there is an understanding and that the end product will work for both. Where it is necessary to have some fine-tuning for the sake of Wales or Northern Ireland, but not Scotland in this case—

[Lord Berkeley (Lab)]

Why not?

[Lord Wigley (PC)]

Scotland may come in but, at the moment, it is doing its own thing. This is a matter of getting a process where fine-tuning is possible.

It is not so much the content that concerns me—frankly, I was engaged in other things yesterday and did not have an opportunity to work through the amendments. As I said in the Chamber, the previous Sunday I worked through every one of the 80-odd amendments, so that I could have a coherent conversation with the Welsh Minister, civil servants in Cardiff and noble Lords who were involved, including the noble Baroness, Lady Humphreys, and the noble and learned Lord, Lord Thomas of Cwmgiedd. I did so in order to get their understanding. To be fair, they were constructive about this Bill—as the Bill stood, relatively few points were of contention to them. But as I indicated earlier, I am concerned that they have an opportunity to see whether any of the changes that are now being made through this large number of amendments might have an effect on their understanding of its slightly different application in Wales than in England.

That is the general intention: to get a system of procurement that can work for the Welsh Government in delivering their economic targets, which they have using successfully over the past few years, and to do so in a way that does not disrupt the UK market. A balance must be struck there. It is essential that both ends of the M4 understand each other on this. I am sure that the noble Baroness who opened for the Opposition will have had conversations with Welsh Ministers and will know about their concerns.

This is not about undermining or opposing the Bill. It is about making sure that it works properly, as intended, for both sides. That is what I hope for. If it is necessary to step back at this point, check and make sure that that is the case, it would be far better for us to do that now rather than pass into law things that become challengeable in the courts, at which point we will end up with all sorts of mess.

--- Later in debate ---

I look forward to the Minister’s answer and would particularly request an impact assessment on these provisions. This should compare the EU way with what is now proposed, and the cost to business of all the bureaucracy it will encounter as it becomes clear which bits of legislation it will be subject to and which it will not. Of course, I would very much appreciate a fleshing out of the Government’s current plans for private utilities.

[Lord Berkeley (Lab)]

My Lords, I added my name to Amendment 2, and tabled Amendments 25 to 27. The noble Baroness raised some interesting questions. I will start by trying to establish some definitions. Clause 1(1)(b)(iii) refers to “a private utility”. We all know what a utility is, but there are subsets of risk and government involvement. It would be nice to know what exactly the Government mean by “a private utility” in the context of this Bill. That is my first question and the reason for my putting my name to this amendment. The Bill defines a “public authority” and a “public undertaking”, but it does not define a “private utility”. I think it should. I have lots of questions and examples that I could ask the Minister to come back on, but I will not do that now.

When one reads about the problems of utilities, whether water, gas or transport, they all have regulators of some description but they often have slightly different powers. I have noticed over the past 10 or 15 years in the water sector that, when the regulator changes the instruction or whatever that it gives a company, it sometimes changes dramatically. If the Government do not like it, they can either advise the regulator quietly, “Would you mind doing it slightly differently?”, or, in extremis, I believe they can sack the regulator.

Then we get into the question of whether these utilities should be in the Bill at all. We had a Question in your Lordships’ House today about a passenger franchise rail operator that was roundly criticised by a number of noble Lords for its bad performance. Should the appointment of those operators be subject to competitive tendering? Should they be appointed by the regulator? They are certainly not at the moment. The regulator is supposed to keep an eye on them, but they are effectively appointed by the Government. One could argue, “What’s wrong with having it in here?”, but I believe they are an excepted utility at the moment anyway.

I am afraid I get confused by all this. I hope that the Minister can explain the exact reasons for excluding these utilities. I am in a bit of a quandary as to whether they should be excluded. It probably comes down to the risk the noble Baroness referred to and whether you like what they are doing. That is not a good reason for doing it, because what we might individually or collectively like is not necessarily the same.

I come back to this question of “a public authority”, “a public undertaking” and “a private utility”. I will give one other example. Some noble Lords will know I have been involved in trying to get the Council of the Isles of Scilly, where I live, to put in a proper bid to get a new ferry. Unfortunately, it has decided that it would like to get £48 million from the Government to give to the monopoly supplier of transport services without any competitive tendering. To me, competitive tendering for all these things is vital because you get not only value for money but a much better service on the whole.

On the whole, the contracting authority should be able to make changes if the people it is contracted with are not performing. I therefore ask the Minister: why are utilities excluded? Is it for the right reason, or will the Government find another way of doing what they presumably want to if the regulators—I think the noble Baroness, Lady Neville-Rolfe, said that the regulators have the last say in this—do not have the scope to award contracts?

As I said on the previous group, we need explanations and definitions. I am afraid that I shall go on a bit about this, because it is very difficult to understand it all if you do not get them.

--- Later in debate ---

I look forward to hearing what my noble friend has to say and whether he can explain the rationale, along with the question of the internet and broadband. Unless I have mistaken it, that is not in Schedule 4 and if it is somewhere else in the Bill, I have not found it.

[Lord Berkeley (Lab)]

I am grateful to the noble Lord for expanding fully on these amendments but in the case of some of the categories in Schedule 4, there is no regulator with the power to appoint companies to do things. Ports and airports come to mind; the Government will probably do those. Are we happy that the Government can do that without any sort of regulatory oversight?

[Lord Moylan (Con)]

Since that is technically an interruption to my speech—

[Lord Berkeley (Lab)]

I am sorry.

[Lord Moylan (Con)]

No, I am delighted. It adds much illumination.

--- Later in debate ---

[Baroness Neville-Rolfe (Con)]

My Lords, I very much welcome the question of the noble Lord, Lord Scriven, about local authorities. They are so often underappreciated and undervalued, and we need to know what can and cannot be done in a collective way—the question he is rightly probing. For example, a simple question would be: for planning services—where my committee has identified a huge shortage of talent and resources in some planning authorities—could you have a collective procurement, and would that be caught by this Bill?

I also ask what the GPA does on telecoms and the internet infrastructure. I must say that I tried in vain, as a Minister, to get contracts for the roll-out of infrastructure around Washington DC—there was not a level playing field. I fear that overseas interests will benefit preferentially from this Bill, as they have done in some other areas, such as contracts for difference in energy. Can the Bill help to hold the GPA to level the playing field?

I strongly support my noble friend Lady Noakes, both on her brilliant technical points, which I barely understand, and on ARIA. On the latter, I agree with her that it must be free from hassle—I think we agreed that in our debates in this House. It probably does not have enough money, but it is important to ensure that it can proceed without the benefit of lots of new regulations, which could be quite bureaucratic to them.

[Lord Berkeley (Lab)]

My Lords, I shall speak to my Amendment 7. I do not think I need comment on any of the other amendments in this group. I tabled this probing amendment to ask why this particular piece of text is here:

“This Act does not apply to Her Majesty acting in her private capacity.”


That is quite unusual in Bills. Usually at the end there is a clause that says something along the lines that Her Majesty and, often, the Duke of Cornwall have given their consent to that piece of legislation. Sometimes when I ask the Minister what relevance the Bill has to the Duke of Cornwall they cannot answer; no one seems able to because it is nicely confidential.

Obviously I can see why Her Majesty acting as the Crown is included in this Bill because effectively the Crown is the Government. However, why is the Duke of Cornwall not included in the Bill in his private capacity? He usually appears alongside Her Majesty. The Duchy of Cornwall has said it is in the private sector, which means, whatever we are going to call it, that it is a private sector organisation that presumably will have to comply with every other part of the Bill.

It is interesting to see where the sovereign grant for transport comes in. I happened to get a Written Answer today. I asked who funded the return charter flight of the Duke of Sussex from the United States for the jubilee. According to media reports, it was the most expensive charter plane that you could possibly get, and it seemed to me that, as in so many of these matters, they could actually have gone on the scheduled service. The answer I had was that it was not funded by the sovereign grant because that

“only covers expenses incurred by other Members of the Royal Family when they undertake official duties on behalf of Her Majesty”,

and clearly that was not the case. When it comes to the sovereign grant and the award of contracts for helicopters or planes across the world that the Royal Family—or even occasionally members of the Government—might take, presumably that will be subject to competitive tendering because they are acting in their public capacity.

It would be good to hear from the Minister what correspondence, if any, took place before Clause 1(9) came into the Bill. Are the Government quite happy with it? I look forward to hearing his answer.

[Lord Wallace of Saltaire (LD)]

My Lords, my name is on some of these amendments. My colleagues have spoken to several of them so I shall merely add a few things.

I was particularly concerned by the term “centralised”. The context in which we are operating is that England is by far the most centralised country in the developed world. The concept of a centralised procurement authority implies, “Whitehall tells the rest of you what to do”. For that reason, we think it important to put a number of phrases into the Bill emphasising that local authorities have a part to play. In particular, we should put here the idea that consortia of local authorities—for example, the local authorities of West Yorkshire operating together—have the ability to co-operate as centralised procurement authorities.

There will be a number of other occasions in the Bill where I and my colleagues will want to put in social enterprise, social values, non-profits and charities. They were strongly emphasised in the Green Paper and the consultation; they are not in the Bill. We think that including those elements will help to broaden the way in which Ministers and officials will approach outsourcing and public contracting. This relates also to the issues that my noble friend Lord Purvis raised about the international dimension and the importance of trade and co-operation agreements, and the point the noble Baroness, Lady Neville-Rolfe, made about the unbalanced way in which these occasionally operate: we are much more open to others than they are to us.