Procurement Bill [HL]

Lord Berkeley Excerpts

Committee stage
Wednesday 6th July 2022 Grand Committee

[Lord Wallace of Saltaire (LD)]

My Lords, the previous discussion has demonstrated the active concerns a lot of members of this Committee have that this Bill should not cramp the ability of local authorities to experiment with forms of local procurement, the encouragement of local enterprise, and so on. I had a message from a county council this morning on precisely that point. We are concerned about this. Perhaps there is enough room below the threshold, but we need to explore that a little more.

These amendments respond to the report on the Bill from the Delegated Powers and Regulatory Reform Committee. Members of that committee are here, so I shall be brief and defer to their expertise.

The Minister will be well aware that many in the Lords are deeply concerned about the Government’s determined move away from clear, detailed legislation towards skeleton Bills and executive discretion. The perhaps soon to depart Prime Minister campaigned to leave the EU on the promise of restoring parliamentary sovereignty but has worked instead to bypass Parliament wherever he can. The Minister for Brexit Opportunities and Government Efficiency, who, as far as I understand it, has some influence over this Bill, is pre-emptively arguing that the Prime Minister was elected by the people and not Parliament, and therefore does not have to go if he loses the confidence of Parliament. We all recognise that both Houses of Parliament are deficient in a number of ways and in need of reform, but, for the moment, we have the constitution that we have inherited, battered though it is, and the spread of Henry VIII powers across legislation is a breach of that constitution, as the DPRRC notes.

Amendment 18 therefore challenges the delegation of power to Ministers to make exempted contracts for the provision of public transport services. Amendment 21 similarly challenges the degree of autonomy given to Ministers in providing concession contracts for air services. Amendment 28, to the schedule on utility contracts, challenges the width of the powers granted to Ministers to make exemption determinations.

Amendment 31 is more egregious on the same theme. It would give permission for Ministers to specify by regulation which services will be subject to the light-touch regime for contracts and which will be excluded. The DPRRC’s comment on this is that the power

“should be narrowed unless the Government can fully justify it.”

I suspect that the Minister is unable to do that.

Amendment 208 also addresses the remarkably wide freedom given to Ministers with regard to light-touch contracts. Here, it goes into tertiary legislation, allowing Ministers by regulations to

“specify services of a kind specified in regulations of the authority under section 8”.

I hope that members of the Committee understand that; I am not entirely sure that I do.

Clause 86, to which I have tabled a stand part challenge, gives Ministers powers to make regulations about a range of documents on contracts and information about contracts. Clause 109 gives Ministers powers

“to amend this Act in relation to private utilities”,

requiring them to consult

“persons appearing to the authority to represent the views of private utilities, and … such other persons as the authority considers appropriate”—

but not anyone with any standing in terms of public or parliamentary accountability.

Clause 110, which is covered by Amendments 530 and 532, relates entirely to regulatory powers. Our amendments would implement the DPRRC’s recommendations to make pricing determinations for qualifying defence contracts subject to the affirmative procedure and restrict the ministerial freedom to raise financial thresholds above the rate of inflation. On all these clauses, the DPRRC argues that the breadth of ministerial discretion should be narrowed. It comments that, in a number of instances,

“the Government … have chosen this approach for no other reason than that it hasn’t yet developed the underlying policy.”

I ask the Minister to attempt to justify these overextended executive powers or, otherwise, to narrow the powers granted and recognise the importance of parliamentary scrutiny and the principle of parliamentary sovereignty. I beg to move.

[Lord Berkeley (Lab)]

My Lords, I put my name to Amendment 18 in the name of the noble Lord, Lord Wallace of Saltaire. I support everything he said. I am worried about the powers that the Government want to keep for themselves. I apologise to the Committee for not being here earlier; I was having a discussion with Ministers on the future railway structure, on which I believe there will be legislation this autumn. To some extent, that pre-empts what is covered by Amendment 18, which is to do with public passenger transport services. It is not just about trains; it includes buses and probably many other things as well.

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However, with full respect to the Delegated Powers Committee and noble Lords’ points, I recognise that change could be considered. We have given an undertaking to engage on these areas before Report, in full cognisance of the Delegated Powers Committee report and the important submissions of noble Lords, including my noble friend, in the debate. In seeking to explain the Government’s belief that the position that we have set out is justifiable, I certainly did not intend to close down discussion on these important points, which include the right and duty of Parliament to hold Governments to account. We must carry through that dialogue on the Bill, and I give that undertaking.

[Lord Berkeley (Lab)]

I take the noble Lord back to his response on Amendment 18 in relation to public passenger transport services. He argued, probably rightly, that they are the responsibility of the Department for Transport and should therefore be exempt here. Paragraph 17 of Schedule 2 defines a “contract”, and paragraphs 33, 34 and 35 at the end of the schedule cover “Concession contracts”, which are all exempt. I assume—perhaps the Minister could confirm this—that the exemptions for “air services” and “a qualifying air carrier” come under the definition of “concession”, because the Bill says this, although it does not define what a concession is.

I am concerned that there are examples in this country of a third category: a franchise. I am not sure where that comes into this; I know of one air service that is a PSO and probably a franchise, and, certainly, some bus and train contracts are franchises. If the Minister does not have the answer to that today—it is a little detailed—perhaps he could write to us, because it is quite important. If the Bill is going to exempt all these things, the whole lot needs to be exempted and handed to the Department for Transport. It is no good having concessions exempted and franchises not. I look forward to the Minister’s comments.

[Lord True (Con)]

My Lords, I will have to take counsel and advice on that, and I will certainly come back. As I said, the fundamental position is to try to keep things as they are, exempting passenger transport services that are currently exempt and covered by the Department for Transport. Concession contracts are dealt with slightly differently under the regime—we will discuss that later—but I will come back to the Committee to clarify the points that the noble Lord asked about.

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[Lord Fox (LD)]

My Lords, very briefly, I thank the Minister for her clear statement. The subject of utilities has come up both on Monday and today, and we are beginning to get some clarity around how the whole utility story fits together, but anything more she can give us on that would be helpful. This is probably not helpful, but it seems to me to be an analysis of the issue. The majority of the trade deals to date are essentially rollover trade deals, and to paraphrase the noble Baroness, Lady Noakes, this legislation is essentially rollover legislation. However, trade deals such as the Australia deal are not rollover trade deals. We are in danger of trying to pour new wine into old skins here.

The issue that my noble friend highlighted here is an example where the new-style trade deal is not easily catered for in the old-style legislation, which is essentially rollover legislation. I am not sure what the solution to that is, other than “more work needed”, but I think—and this is a dispassionate and hopefully helpful observation —we are looking at a new trading position. The Government talk about that all the time, but we are essentially looking at legislation that was dealing with an existing set of trade deals which are, by their nature, different from the new ones. This is what is being thrown up, and we will start to see problems thrown up increasingly.

[Lord Berkeley (Lab)]

To go back to Amendment 20, the noble Baroness gave some useful explanation of the definition of a utility. I want to go on briefly to the example that the noble Lord, Lord Purvis, mentioned, which is freeports. That presumably comes under paragraph 5 of Schedule 4, on page 86. It is not clear to me whether any of the activities of a freeport are exempt or not. In other words, the freeport gets a load of money from the Government, but does it have to comply with the procurement regulations and everything else in the Bill? Does it have to be transparent about how it complies, whether it has sent out for three quotes or whatever, and whether the contracts have been awarded fairly? That is one example, and I expect there are many others in other sectors. It would be interesting to know because when we get to Schedule 2, there are so many different definitions in there that it is quite difficult to understand which applies to what. I am sure that, at some stage, the Ministers will try to give us some examples of all these different issues on page 81.

[Baroness Hayman of Ullock (Lab)]

My Lords, I must say, I find the utilities section of this quite confusing in some areas. The more clarification we can get from the Minister, the better. It is not just this bit; it is the fact that it is cross-referenced a lot right across the Bill and is impacted by so many other pieces of legislation, including internationally.

We talked with officials about the Australia trade agreement this morning; the noble Lord, Lord Purvis, raised this. I am still slightly confused as to how that all links together. Rather sadly, after the discussion, I went and found the relevant parts and read them. The Bill talks about universal service obligations, postal monopolies, exclusive suppliers and specified collection, transport and delivery services. I know that the Minister is not able to come back to us on this now but I would appreciate some kind of written explanation of how this all works together and what the implications are of having that kind of reference to postal services in a trade agreement. What impact does that have on future procurement legislation? Will the Procurement Bill have an impact on future trade agreements in this area? Personally, I find this quite confusing; it would be extremely helpful to have it laid out in a crystal-clear fashion so that we do not end up with this kind of confusion and the debates we are having.

I will not repeat all the things that noble Lords said when they talked about having more clarification on Schedule 2. I will just briefly come back to cross-referencing throughout the Bill. In the previous debate, we talked about the committee report, which again mentions Schedule 4, the utility activities exposed to competition, the provisions of the WTO agreement—the GPA—and so on. For me, a lot of this is about having a clear understanding of which utilities lie in this group and which lie in that group; which utilities will have to follow certain rules; which will be exempt; and how they will be exempt. I would appreciate proper clarification on all those areas because this is a lot to take in; a lot of it needs to be right as well.

I appreciate that I have asked the Minister to do quite a complicated task but, in Committee and certainly ahead of Report, that sort of information and clarification would be extremely helpful.

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My second point, which has been alluded to by a number of colleagues, is the way that the noble Baroness, Lady Worthington, has skilfully linked putting sustainability in the Bill with innovation. I absolutely agree that those two things are fundamental. I do not mind what wording the Government take, but those two things have to be looked at together. With all the issues that the noble Lord mentioned, if we do not get innovation clearly sorted out, then companies involved in net zero and the environment are the disruptors. They are small companies, not the established big boys—or big girls, if you want to be gender neutral. That is about as far as I will go on gender neutral before we get into arguments. We need to make sure that the Bill prioritises innovation. Otherwise, we will not be able to ensure that the smaller disruptor organisations which are involved in net zero and the environment can play the role that we need them to play in future. Therefore, I look forward to the Government’s response to these points around putting into the Bill a commitment to sustainability goals through delivering the net zero and environmental goals and ensuring that innovation is in the Bill at the same time.

[Lord Berkeley (Lab)]

My Lords, I support all the amendments in this group, but particularly those tabled by my noble friend Lord Hunt of Kings Heath. In his introduction, he emphasised the importance of rigour, accountability and transparency. I would add advance notice. The Minister who responds may say that it is all in the Treasury Green Book. It probably is, but anybody who has looked at small projects—localism, levelling up, town centres—will know that you have to comply with the Treasury rules, but it is hard to find them, especially for people who do not understand them too easily. My noble friend has put in this amendment and all the other things that go with it. It is really important in a Procurement Bill that people know what to expect and how to do it.

It also needs to be not confidential. I have a couple of examples. The first is an excellent example of the need for a business case. Some noble Lords may know that Cornwall Council was supporting a new stadium for football, rugby and everything else in Truro, which everybody seems to want, and there is private sector involvement. Last week, Cornwall Council decided that it was not going to do this and withdrew from it, saying that there was no proper business case. That was brave, when everybody wants it, but there was no business case. At least it understood what was going on, but that is not the case for an awful lot of other people—I have mentioned the ferry to Scilly before, but will not mention that again—and the other side of it is things such as HS2, where the budget goes up through the roof.

My final question to my noble friend—I know he will do it for Report—and a few other people, concerns how you enforce these things when something goes wrong. That is the biggest problem that we have not solved yet. I look forward to the Minister’s reply.

[Lord Wallace of Saltaire (LD)]

My Lords, I hope the Minister is impressed by the cross-party consensus on a number of things on this issue. At the moment, this is very much a skeleton Bill. The demands to put more in the Bill come from all parts and relate to a number of different clauses. I hope that he will be able to respond outside Committee, between Committee and Report, to consider whether the Government might be able to come back to satisfy some of these requests with appropriate language. As we have already stressed, the language is already there in a number of government publications; it is just not in the Bill. I look forward to his response.