Public Procurement (International Trade Agreements) (Amendment) Regulations 2022

Lord Collins of Highbury Excerpts

Wednesday 15th June 2022 Grand Committee

With those few remarks, I welcome the regulations before us but seek clarification on the public procurement aspects.

[Lord Collins of Highbury (Lab)]

My Lords, I am grateful to the Minister for introducing these regulations. As he and others have stated, they are basically a continuity agreement while we process the much bigger piece of legislation to which the noble Lord, Lord Lansley, referred, the Procurement Bill. One of the things I open with is to repeat the mantra that the Minister often does about how this House conducts its role in scrutiny of legislation. When I read Hansard from the other end, I thought I would get some useful questions from the Opposition—and of course there was none, so I am grateful for noble Lords here today who have prompted an interesting debate. I suspect that most of the questions will be answered on the general legislation on procurement—the Procurement Bill—including some of the issues that we will address in amendments, not least defence and security, which are critical issues.

I do not want to repeat the points made by the noble Lord, Lord Lansley. I will be interested to hear the Minister’s response, but the Opposition support the instrument and are happy that it provides the continuity necessary before other legislation takes over. I should add that I am not formally becoming a shadow Cabinet Office Minister; I am simply standing in for my leader, who covers these issues—and as deputy leader I of course do as I am told. I have at least been able to speak for a short time in support of the instrument. I echo some of the comments already made and I look forward to the Minister’s response.

[Lord True (Con)]

My Lords, I thank those who have spoken, including the noble Lord opposite; I nearly always say “my noble friend opposite”. I also looked at the proceedings in another place, but I will tread no closer to that than he did.

I am grateful for the general welcome for these provisions. I was asked a couple of points. I am not sure I can answer every one, but if I do not I am sure we will pick them up. On the question of whether state subsidy is defined in the regulations, it is not defined in this SI. It was also not defined in the UK-EFTA agreement procurement chapter from which this follows.

I was asked about abnormally low tenders and subsidies going more widely than the definitional point. Article 6.9 of the UK-EFTA agreement provides that, where a tender appears to be abnormally low, the contracting authority may ask a supplier whether the price in a tender takes subsidies into account. That was the point to which my noble friend acutely referred. The instrument makes this explicit—it is on the face of the procurement regulations. Prior to the UK leaving the EU, contracting authorities and utilities receiving an abnormally low tender could investigate whether the supplier had obtained state aid and, if that was not compatible with Article 107 of the Treaty on the Functioning of the European Union, it could reject the tender. These provisions were removed from the public procurement regulations through EU exit legislation.

The current procurement regulations are largely transposed from the EU directives, which include a number of permissive provisions. For this reason, it makes sense to make explicit mention of the fact that, when investigating abnormally low tenders, contracting authorities are able to make inquiries as to whether the bid includes subsidies. However, overall the Procurement Bill will aim to deliver a simpler regulatory framework and increased flexibility and does not include every possible action that a contracting authority might take. Therefore, there has not been such an impetus to make explicit this provision in the new Bill.

So far as the relationship is concerned between the Bill and where we are now—and both my noble friends referred to the period between now and the coming into being of the Procurement Act, if your Lordships so please; I am never daring enough to take that for granted—we need to bring forward this statutory instrument now to amend existing procurement regulations to enable the procurement provisions of the UK-EFTA agreement to come into force as soon as possible. When the Procurement Bill has received Royal Assent, during its implementation period it will repeal certain UK procurement regulations, including the UK public contracts regulations; the UK utilities contracts regulations; and the UK concession contracts regulations, to which the UK-EFTA agreement is being added. However, this is not expected until at least six months after Royal Assent.

The UK-EFTA agreement is included in Schedule 9 to the Procurement Bill, along with all other relevant international trade agreements, which ensures that the procurement obligations regarding EFTA suppliers will be carried forward seamlessly into the new regime. The amendments made by these regulations also add, as I said in my opening remarks, the UK-EFTA agreement to the corresponding Scottish procurement regulations, which will not be affected by the Procurement Bill.

I assure my noble friend Lady McIntosh, as again I said in my opening remarks, that nothing in this SI or, indeed, in the UK-EFTA arrangements overall, reduces any standards. We remain committed to holding up high environmental product and labour standards, and I can certainly give that assurance.

On the question of the lower thresholds in legislation, there are provisions—and I am happy to correspond or at least send advice to my noble friend before we reach the Procurement Bill. As she will see, there is a whole section relating to the level below which there are exemptions. We must abide by our international obligations in relation to trade under the GPA; that is, to give fair access to both sides of the agreement, which is reflected in these regulations.

We have enjoyed a strong trading relationship with Iceland, Liechtenstein and Norway for many years, as some noble Lords were kind enough to refer to. Indeed, I think that Norway is in the top 10—perhaps our 10th most important trading partner. By implementing UK-EFTA procurement commitments, this instrument will, we hope, help to continue and build on this prosperous and friendly relationship between our four countries.

I hope that colleagues will join me in supporting these regulations. I am grateful for the general tenor of the debate. I commend the regulations to the Committee.