Procurement Bill [HL]

Lord Coaker Excerpts

Committee stage
Monday 24th October 2022 Grand Committee

[Baroness Northover (LD)]

My Lords, I am a co-signatory on this amendment and, from the Lib Dem Benches, we strongly support the noble Lord, Lord Hunt, in his endeavours to combat the appalling issue of forced organ transplantation. He has made a strong and comprehensive case, as did the noble Lord, Lord Alton—as ever. Like them, I am glad that Ministers have been responsive over the past few years in relation to these appalling practices. I hope that this continues. As the noble Lord, Lord Hunt, said, the amendment is designed to exclude suppliers located in a country

“at high risk of forced organ harvesting”

from being awarded a public contract involving

“any device or equipment intended for use in organ transplant medicine”

or in related regard—for example, research.

As the Minister will know, this House has a very well-informed and cross-party approach to combating forced organ transplantation. She will be aware of the significance of such obvious and lengthy cross-party working. I assume that this might rightly be in red on the risk register for the Bill. I have noticed that that might be the case.

I recall a few years ago that a Peer, who is a current government Minister, was praising the Chinese for the speed and apparent efficiency of their transplant programme. I am certain that they would not have expressed that view had they known what we know now. That is surely thanks to the assiduous work of the noble Lords, Lord Hunt and Lord Alton, and others. They, in turn, have been supported by the meticulous examination of the evidence by the China and the Uighur tribunals, both headed by Sir Geoffrey Nice, former prosecutor in the Balkans war-crimes tribunals. They shone a light on the terrible practice of forced organ harvesting. I noted that they found—as others have noted—that victims in China were targeted because of their religion, beliefs or ethnicity.

As the noble Lord, Lord Alton, has just said, the China tribunal concluded that forced organ harvesting has been committed for years throughout China on a significant scale; and that commission of crimes against humanity against the Falun Gong and the Uighurs have been proved beyond reasonable doubt. Noble Lords have also heard the view from the United Nations; securing that was very difficult to achieve. The noble Lord, Lord Alton, as ever, calls some of the individuals concerned into our view, so we cannot say that we did not know.

The medical profession has been accused in the past of turning a blind eye to such practices. The BMJ criticised the transplant community for failing to implement high ethical standards. I note, however, that, in the BMA’s briefing for the Bill, it states that,

“upholding ethical procurement standards is essential.”

It refers to the procurement of medical equipment, including PPE, from the regions in which labour abuses have been alleged. It states that it would support

“any amendments to strengthen the legislation to help ensure ethical procurement and transparency throughout the supply chains of health-related goods.”

That would certainly apply to this amendment. In addition, as we have heard, the UK enjoys a global reputation for high-quality medical research. It is something that the Government emphasise as being key to the United Kingdom’s future. As the noble Lord, Lord Hunt, has indicated, it is thus vital that we protect medical researchers from inadvertent involvement.

During the summer, in the then Conservative leadership debates, Rishi Sunak was asked about dealings with China. It is good that he acknowledged the potential human rights challenge. However, he also said that he sought to have a constructive engagement. This amendment would close a loophole, given that he has now been chosen by the Conservatives to be the country’s newest Prime Minister. It will help to ensure that the Government do indeed properly pay attention to human rights, which the new Prime Minister said was an aim of his.

In regard to the issue raised by the noble Lord, Lord Alton, in relation to the hospital in China, will the Minister say whether UK Export Finance funds were given in this case? If she cannot tell me now, can she write to me? In summary, I commend this amendment to the Committee, and I hope that we will see progress and engagement with the Government.

[Lord Coaker (Lab)]

My Lords, I apologise; I will see how long my voice lasts—not long, I imagine some people hope, but we will see how it goes.

I too congratulate the Minister on her promotion. She has already learned some of the tricks of the ministerial trade: she has gone through what she has previously said and asked her civil servants to have a look and see what she could say back if anyone raised it, which relates to what she opened with about simplification.

The serious point is that the fact that she has questioned the Bill will make her a very good Minister. That does not mean undermining the Bill, but you have to have a Minister who challenges it and listens to what people say, otherwise the whole process is pointless. From that point of view, we are all reassured by her appointment.

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[Lord Scriven (LD)]

I apologise to the Committee for being late; I have literally just got off an aeroplane. Like others, I welcome the Minister to her place. I will welcome some of the acrobatics she may have to do on Report now that she is sitting there rather than next to the noble Baroness, Lady Noakes, as she was earlier in these Committee proceedings.

The noble Lord, Lord Lansley, has just spoken a lot of sense. I declare my interest as someone who advises a company that works with frameworks. I have seen some games played with frameworks, though not by the company I advise, with frameworks used for a number of purposes completely alien to why the original contract framework was set. It debars competition and innovation, particularly when the public body decides that it wants something completely tangential to the original framework contract and the original purpose, and allows a company to continue building its commercial relationship with that public sector body without necessarily having the core competences required. It then goes into a lot of partnerships with adjunct companies that have no relationship back to the original company when the framework was initially set.

I support the noble Lord, Lord Lansley, in trying to work out, in his Amendment 249, what the fee purpose is in terms of companies going around the framework. I particularly agree with him on the issue of small and medium-sized enterprises. I think this would be a block in that field for SMEs in particular. Could the Minister explain a little more about the reason for the fee, how it will allow competition and how it will not debar SMEs in particular from this type of framework agreement if it is to continue?

[Lord Coaker (Lab)]

My Lords, we are getting into some detail now. That is the purpose of Committee and it is very constructive and informative. I very much agreed with the points made by the noble Lord, Lord Aberdare, about framework alliances and whether Clauses 44 to 47 include such alliances. If they do not, why not? The noble Lord’s point requires a simple answer: yes, they do, or no, they do not. He has asked an important question about the inclusion of framework alliances.

Similarly, I thought the points of the noble Lord, Lord Lansley, were really well made. Amendments 247, 248 and 249 have been put down specifically to ask the Minister whether the Government’s new subsection (3G) answers some of those points. That is the sort of detail we need to get into, as the cascade principle is really important. I think the noble Lord, Lord Scriven, also supported that.

I have a couple of specific points on the importance of transparency and openness, which we are all striving for. The noble Lord, Lord Fox, asked the Minister about what “value for money” means; that could almost be taken as a trick remark but it is crucial, as these sorts of definitions are really important. Therefore, can the Minister say what “proportionate” means in government Amendment 246? One person’s “proportionate” would be to allow people to get through without proper checks. However, without “proportionate”, the burden on some businesses and suppliers would be completely unacceptable—just too much and unrealistic. It would be helpful for the Committee to understand the use of “proportionate” in new subsections (3A) and (3D) and “may not” in new subsection (3C).

Government Amendment 246 talks about proportionate means of ensuring that suppliers have the relevant

“qualifications, experience or technical ability”

to perform a contract. It would be helpful if the Minister said a bit more about what that means.

More generally, since we are discussing Clauses 44 to 47, can the Minister explain why so many respondents to the Government’s consultation opposed open frameworks? Some 27% of the respondents did so. Is that a high negative response? I am not sure whether it is high or low, but it struck me as quite a lot. The Government did not agree with that view and ploughed on with Clause 47.

On Clause 45(3), can the Minister explain what sort of reasons there could be for a framework to exceed the normal eight years for a defence and security contract and four years for other frameworks? The Government seem to believe there might be a necessity to clarify that through their own Amendment 251, which seeks to clarify some of that but also reflects a concern about the number of years that could apply to a contract. That would be helpful.

Our limited discussion on the use of frameworks has been very important; it has sought to get into some of the details, which are what mean they do or do not work well—sometimes on the basis of what a particular word means. Like many noble Lords, I read the assessment in preparing for this Committee; you can see the point the noble Lord, Lord Fox, made in our earlier debate about a cry for clarity on what the Government are seeking to achieve. What different words mean is crucial. Building on the noble Lord’s plea to know what “value for money” means, a little more about what “proportionate”, et cetera, means in the context of government Amendment 246 would be helpful. The Minister may need a little more time to reflect on that but, if you are seeking a contract under a framework, the word “proportionate” will mean everything—or nothing. It would be very helpful if the Minister could clarify that.

With that, I think the Government have taken some very important steps forward under these clauses.

[Baroness Neville-Rolfe (Con)]

My Lords, I thank the noble Lords, Lord Aberdare and Lord Scriven, and my noble friend Lord Lansley, for their kind words.

I will start with the government amendments, because even though this will not be in strict order, it will help to answer the other points that have been raised. Frameworks are a well-established commercial purchasing tool, used widely across the public sector. Having looked at some of the public responses, that percentage figure that was quoted is not worrying. Key is whether this is a sensible provision and whether we are reforming them in the correct way. The Bill makes a number of improvements to the effectiveness of frameworks, to increase flexibility, provide value for money, et cetera.

I am glad that the noble Lord referred to government Amendment 246 because it is quite a substantial and important amendment among the hundreds that I apologise for having tabled in Committee. It allows contracting authorities to set conditions of participation in a competitive selection process for the award of a contract under a framework. New subsections (3A) to (3F) impose restrictions on the use of such conditions to those which apply to conditions of participation in a competitive tendering procedure under Clause 21. These include limiting the conditions in various ways, for example, to those which are a proportionate means of ensuring that suppliers have the relevant qualifications, experience and technical ability to perform the contract, of ensuring that the conditions do not break the rules on technical specifications, and of requiring that equivalents must be allowed where particular qualifications are required. The question on proportionality is a good one. I do not have as good an answer for the noble Lord as I would like, so I will write to him on that point.

My noble friend Lord Lansley commended new subsection (3G). This restricts the basis on which proposals received as part of a competitive selection process under a framework can be assessed to all or some of the award criteria against which tenders the frameworks were assessed. This is to ensure that suppliers that have already been admitted to a framework do not have to meet entirely different criteria later. New subsection (3H) allows for the award criteria to be refined.

Government Amendments 251 to 255, and 258 to 260, relate to rules for frameworks for the future award of contracts. The remaining government amendments in this group deal variously with light-touch contracts, ensuring open frameworks work as intended, and with minor tidying-up changes.

Turning to the noble Lord, Lord Aberdare, the thing that we worked on together when I was last a Minister is still unresolved, so I feel a sense of guilt.

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[Lord Coaker (Lab)]

My Lords, this has been another interesting debate. This group is on oversight and remedies. If you are going to have something worth legislating for, it has to have some sort of oversight and remedy. In other words, you have to see whether you are achieving what you wanted to and, if not, know what you going to do about it. It is therefore an important section, but to do that you have to have the right fundamentals in the Bill to have oversight and remedy.

I agree with my noble friend Lady Thornton’s amendment. She has been consistent throughout this Committee in trying to ensure that the Bill reflects the importance of social value. The noble Lord, Lord Scriven, supported that in his remarks. I know my noble friend will continue to argue for it, and we will support her should she wish to take it further on Report. It is really important, and I thank her for that.

As we are coming to the end of our remarks, I shall say that I agree with the point made by the noble Lord, Lord Fox, on Amendment 353A, tabled by the noble Lord, Lord Wallace, on what has happened to the procurement review unit. It was in a Green Paper and it seemed to be universally applauded—except, obviously, somewhere in government, so it was struck out. It would be interesting to know why it was struck out. Everybody supported it, except the Government, so why were they wrong and the Government right? Sometimes I find it baffling to understand why something is done. A procurement review unit seems essential to review what you are seeking to achieve. It is not a weakness but a strength. Those are my remarks about that.

I have to say this openly to the Committee: I am devastated that I did not notice the amendment from the noble Baroness, Lady Noakes: Amendment 477. Honestly, it is absolutely brilliant. The noble Lord, Lord True, has been promoted for being a socialist in charge of the Bill; the noble Baroness, Lady Neville-Rolfe, is on her way; and now we have this from the noble Baroness, Lady Noakes. Clause 96 is quite astonishing. I reread it to make sure; when I read it before, it completely passed me by. I will read it out, because people will not understand if they read Hansard without also reading this. Clause 96(1) says:

“An appropriate authority may investigate a relevant contracting authority’s compliance with requirements of this Act.”


So, we have a really important government Bill that will become law, and then, in subsection (5):

“In this section—‘procurement investigation’ means an investigation under subsection (1)”—


which I have just read out—

“‘relevant contracting authority’ means a contracting authority”,

as the noble Baroness, Lady Noakes, points out,

“other than … a Minister of the Crown or a government department”

and various others. Why would the Government set up something that is desperately important—in other words, a procurement unit—which makes purchases of hundreds of billions of pounds, but their own Bill says they will not investigate them?

Amendment 477 is brilliant and, as I say, I am devastated that I did not think of it or notice it. Fair play—I am very fair. More seriously, the amendment points out something that fundamentally seems to be a flaw in the way the Bill is drafted. Otherwise, there must be some incredible explanation or reason that I cannot think of—I do not know if anyone else on the Committee can think of any.

To finish, oversight and remedies are an extremely important part of any Bill, because that is how you ensure that what you seek to achieve is achieved and that you are held accountable. The amendments seek to answer those questions. Unless the Minister is able to respond in a way that persuades us, I think there are certainly one or two issues that we must come back to. With that I will sit down. It is a brilliant amendment, honestly.

[Baroness Neville-Rolfe (Con)]

I thank noble Lords for an interesting debate on these non-government amendments. I do not think that I have a perfect reply to my noble friend Lady Noakes’s three questions. We are due to meet to discuss various aspects of the Bill and I would like to explore her questions further, and then perhaps I can write to the Committee when it is clear to me what the right replies to those questions are.

I will attempt to comment on the amendment that the noble Lord, Lord Coaker, has just talked about, on why government departments do not have the same obligation to have regard to recommendations under Clause 97. It is a simple question, and our response is that it is not necessary to include government departments in Clause 96 and 97, because the appropriate authorities have sufficient influence over contracting authorities to ensure that any recommendations that result from an investigation are duly taken into consideration. To confirm, investigations, findings and progress reports may be published by the relevant authority acting as a further incentive. It is simply unnecessary to provide statutory powers in respect of government departments, whereas due to the different relationship with non-central contracting authorities, statutory powers were required to ensure appropriate engagements for these purposes. As noble Lords will know, we have quite a well-developed procurement operation now, right at the heart of Government, sitting in the Cabinet Office, which I think is an improvement. That is why it is not provided for in the Bill.

Just before I leave voluntary standstills, let me say that I will make sure we come back properly on the exchange we had earlier. We want to maintain voluntary standstills for dynamic markets—they are intended to be quick to use, agile and efficient, as we heard from my noble friend Lord Lansley—and for light-touch contracts, which are often for time-sensitive services such as the provision of health and social care. We do not want to make the light-touch contract rules stricter in this regard than current legislation, as we think that could lead to some problems.

Amendments 349A, 349B and 353A were tabled by the noble Lord, Lord Wallace of Saltaire, and others. They seek to legislate for the procurement review unit with a new clause. The procurement review unit, which is very important, is not specifically referenced in the Bill as it will be exercising statutory and non-statutory powers on behalf of Ministers. The proposed new clauses would therefore conflict with existing provisions. Furthermore, considering the importance and potential implications of the decisions the PRU will support the Minister of the day in making—the proper statutory process—we believe it would be inappropriate to delegate that ultimate responsibility to unelected officials below ministerial level.

The PRU will work on behalf of the Minister of the day in two key areas. The first area is debarments. Clauses 56 to 61 set out the process for the establishment of a debarment list of excluded and excludable suppliers; this has already been debated. Under these clauses, it is envisaged that the PRU will investigate whether a supplier is subject to an exclusion ground and whether the issues in question are likely to arise again. The PRU will issue advice to the relevant Minister, usually the Minister for the Cabinet Office, who will take the final decision whether to add the supplier to the debarment list.

The second area is improving compliance with the Bill. Clauses 96 to 98 provide the framework and statutory powers required for carrying out procurement oversight. The PRU will exercise these oversight functions on behalf of the Minister and make proposals regarding any investigations, recommendations and statutory guidance it considers appropriate for the Minister’s ultimate approval.