Trade Bill

Lord Lennie Excerpts

Committee stage & Committee: 1st sitting (Hansard) & Committee: 1st sitting (Hansard): House of Lords
Tuesday 29th September 2020 Grand Committee

Moved by

[Lord Lennie]

1: Clause 1, page 1, line 16, at end insert—
“(1A) No regulations under subsection (1) may be made until the Secretary of State has entered into negotiations with other parties to the GPA with the objective of enabling greater labour market interventions and compliance with ILO standards in any UK procurement contract to which the GPA applies, and(a) the Secretary of State has made a statement to the House of Commons that the objective has been achieved either in full or in part, or (b) the Secretary of State has made a statement to the House of Commons that the objective has not been achieved.”Member’s explanatory statement
This amendment would require the Secretary of State to enter into negotiations to secure greater labour rights in procurement contracts that the GPA applies to, and to report back on the outcome of these negotiations.

[Lord Lennie (Lab) [V]]

My Lords, like others, I regret that the Committee stage of the Trade Bill has to take place in a Covid-secure manner—our new normal—and I look forward to when we can all return to the Chamber. Until then, we must make the best of what we have. I am extremely grateful to all the staff who have worked so hard to make this all possible.

Trade is an essential component of the UK’s future economic recovery from Covid-19 and to our continuing future prosperity. Labour’s overarching concern is to ensure that the necessary protections and measures that have been developed over more than a century of rising standards are not put at risk by this or any other future Government. We cannot have a series of trade deals that open the door to reduced workers’ rights or living standards or to higher carbon emissions. To ensure that this is not the case, Labour supports acceding to the GPA after Brexit as an independent member, while safeguarding the capacity for public bodies to make procurement decisions in keeping with public policy objectives.

The Government have said that it is their objective to join the GPA as an independent member, with substantially the same arrangements that we currently have with the EU. If we are to have this, there is the significant matter of retained EU law. For that statement to hold true, surely the EU law must continue to apply beyond 31 December 2020. As an example, the public contract regulations will end at the end of next year. It remains essential that the UK maintains the strongest procurement systems for companies in the UK. Labour is about having the strongest possible procurement system. This would instruct the Government to pursue with GPA partners the inclusion of labour standards, environmental standards, support for small and medium-sized enterprises and the consideration of the public health consequences in our annexes to the GPA.

Amendment 1 refers to

“labour market interventions and compliance with ILO standards”.

We want to ensure that companies that fulfil their obligations to the workforce and meet their commitments to working with trade unions in a constructive manner are not undercut by companies that do not. This would reward businesses while supporting their workforce. ILO standards seek to support and protect workers in supply chains, especially those exposed to modern slavery, which are a vital component of procurement.

Amendment 2 refers to environmental exceptions with carbon considerations. Public procurement through the GPA must help in the fight against climate change. Current UK minimum standards take into consideration energy and water usage, carbon footprint, resource efficiency and life-cycle costs in order to set minimum standards of sustainability for government purchases. Our standards need to be protected, both to maintain these procurement standards and to ensure that our schedules at the GPA remain up to date, with action to meet the climate crisis.

Amendment 3 seeks to ensure that SMEs have access to procurement contracts, which can often be a real problem. Now, more than ever, this is essential if this recession is to turn into recovery. Amendment 4 seeks to improve the way in which public procurement operates by addressing public health. The public health value of a provider should be a factor in awarding contracts, not just price. Public health medicine is part of the greater enterprise of improving the public self and that is why procurement matters in this respect.

The TUC has a range of concerns about the provisions of the GPA being more limited than the current measures within the EU procurement directive of 2014, which were transposed into UK domestic law through the public contract regulations 2015. The TUC says that there is no condition in the GPA that obliges member states to ensure that, when performing public contracts, contractors comply fully with the applicable environmental law and with the social and labour standards set out in the EU and national laws in collective agreements. The TUC believes that provisions must be made in the Bill to enable contracting authorities in the UK to include wider definitions of social value and price-quality ratio as well as obligations set out in respect of social, environmental, labour law and collective agreements within their tender specification, contract evaluation and award criteria. These should be incorporated into the regulations that replace the public contract regulations when they expire in December 2020.

Amendments 100, 101 and 102 seek to ensure that any secondary legislation needed to implement commitments under the GPA following our accession should be affirmative. Labour believes that Parliament should have the right to scrutinise the all-important “coverage schedules” that the Government will lay before the WTO in respect of our accession to the GPA.

We are minded to support Amendment 5 in the name of the noble Lord, Lord Hendy, which would ensure that the UK could not implement the GPA if it would prevent public authorities from insisting that public procurement tenders and contracts conform to the UK’s ILO commitments.

I hope that the Minister considers the long-term economic, social, environmental and labour values to be gained from this approach. Unless we are prepared to use this moment, it is hard to see how we will maintain the standards of procurement that we currently have, let alone enhance them. I beg to move.

[Baroness Burt of Solihull (LD)]

My Lords, I shall speak to Amendment 3 on small businesses, to which I have added my name. As we enter the post-transition and post-Covid world of international trade, we must ensure that the role of SMEs in procurement is fully protected so that it can help strengthen the UK’s economic playing card as we navigate the current turbulence and beyond.

At Second Reading, I asked the Minister, the noble Lord, Lord Grimstone, whether, given our new freedom from the EU, we should adopt the policy of the US, Canada, South Korea and Japan to put an annexe in our GPA schedules to allow them to set aside and disapply regulations on behalf of small businesses and other organisations to help bring parity of support for small businesses in accessing markets against larger firms. After all, is that not why the UK decided to leave the EU in the first place? The noble Lord informed me that non-discrimination is the core principle of procurement in the UK and we do not have set-asides for SMEs in international agreements. Okay—I hear him. But whether or not it is intended, it can be more difficult for small businesses to compete against larger firms by virtue of their size and the complexity and requirements of the procurement process.



I will not detain the Committee by going through them all, but when pitching for public contracts, I suggest that few small businesses would feel that the playing field was equal. Take late payment, the scourge of small businesses, particularly because of the relative power of the organisation doing the procuring. The Federation of Small Businesses has long been calling for bad payers to be barred from applying for government contracts. I know that this is something that the Government acknowledge, and this amendment would effectively help the Government to defend themselves against late payers on the trading stage. Why does the Minister feel confident that, when we are competing against the likes of the US, South Korea and Japan, UK small businesses will get fair access to public contracts? Nobody wants to see poor payment practices on the trading stage; this is about fairness and parliamentary accountability, so I would appreciate some commitments from the Minister today.

That brings me to the point of the amendment. It lays a duty on the Government to ensure that small businesses can compete fairly to get greater access to procurement contracts in countries to which the GPA applies. It makes sure that the Government fulfil this obligation by laying a Statement before Parliament reporting that this has been done, and the outcome. If the Minister is committed to a level playing field for small businesses, why not agree to put it into law?

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[Lord Grimstone of Boscobel (Con)]

I thank the noble Lord, Lord Fox, for listening so intently to my speech to make those calculations. It is of great benefit to me that he did so. The changes are technical. I do not have them in front of me, although I know what they are. However, if I may, I shall write to the noble Lord and recount them for him.

[Lord Lennie (Lab) [V]]

I thank the Minister and other noble Lords who have taken part in this debate, in particular my noble friends Lord Hain, Lord Hendy and Lady Blower for their contributions on Amendment 5, my noble friend Lord Rooker on Amendment 100, and my noble friend Lord Judd for his childhood memories from the age of 13 about maintaining standards.

We are about trying to avoid any possibility of lowering standards or racing to the bottom. Maintaining current standards and including provisions in current EU law in the crossover to post-EU exit would be the greatest reassurance that we could all receive about the Government’s intentions. I am not in any way doubting the Minister’s well-intentioned summary of his intention and the Government’s provisions. However, if it is not carried over, it leaves the possibility of escaping from one or other provision at some time in future.

The noble Lord, Lord Balfe, remembers Jacques Delors coming to the TUC and talking about the EU’s intentions to provide standards across the whole of the continent. At the time, part of the TUC felt conflicted with those who believed that collective bargaining was the only way forward. A long time has passed since then, and we recognise the importance of legislation in supporting workers and standards, and other provisions that are subject to public procurement.

Therefore, there is no clear-cut decision to be made on these amendments, and the affirmative process brings things into the open. It is not just about the minimum decisions about changing departments’ names; it is about matters, from that, right the way through the procurement process that can be brought out into the open and debated in both Houses as and when it is necessary. It provides the Government with the opportunity to avoid the charge that they are not subjecting themselves to proper scrutiny. That said, for the moment, I beg leave to withdraw these amendments, but we may well return to this at a future stage of the Bill.

Amendment 1 withdrawn.

Trade Bill

Lord Lennie Excerpts

Report stage & Report: 3rd sitting (Hansard) & Report: 3rd sitting (Hansard): House of Lords
Wednesday 6th January 2021 Lords Chamber

Moved by

[Lord Lennie]

46: Schedule 2, page 13, line 26, leave out from “1(1)” to end of line 27 and insert “may not be made unless a draft of the instrument has been laid before, and approved by a resolution of, each House of Parliament.”

[Lord Lennie (Lab) [V]]

I will be brief. Framing this debate has proved to be difficult because, quite rightly, the Government and the Opposition are focused on dealing with the pandemic, and therefore less attention has been paid to Britain’s post-Brexit trading arrangements. That said, the Government’s intentions are to achieve the best possible trading position and, as regards the amendment, the best possible public procurement arrangements. The intentions are clear and agreed. How to do so is not.

The Labour Party, along with many others, including the TUC and good, solid companies, are of the view that the Government must introduce measures that protect the best from being undercut by the less good. A race to the bottom should not be entertained. The Government have made several previous commitments: there was to be a Green Paper on this subject; there would be a review of the relevant EU law, post Brexit; we were told that there would not be any risk of a race to the bottom. However, that fear persists.

Can the Minister answer some questions, even at this late stage of the Bill’s passage? Will the Government seek to protect and enhance workers’ rights, living standards and our climate change position post Brexit? Will they implement International Labour Organization —ILO—standards as a form of protection, especially against modern slavery? What is the Government’s position regarding what was known as EU retained law in the area of public contracts? Do they intend to legislate to make good any shortcomings in this area? Unless the Government commit to those aims, it is hard to see how protection and standards will be maintained, let alone enhanced, in the years to come.

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[Lord Grimstone of Boscobel (Con)]

My Lords, I will now address Amendment 46, tabled by the noble Lord, Lord Lennie, which seeks to apply the affirmative procedure for any regulations made using the powers under Clause 1.

Perhaps understandably, because this is the last amendment that we will be addressing on Report, noble Lords wished to get certain matters off their chest at the commencement of debate on this amendment, so perhaps they will understand if I do not respond specifically to those points but restrict my comments to the amendment. I will of course commit to the noble Lord, Lord Purvis, that I will write to him with details of the exact timetable, which I do not have available to me at the moment.

Turning to this amendment and, as I say, restricting my comments to the amendment, given the late hour, I first remind noble Lords that the UK will accede to the GPA on the basis of continuity. This means that the “coverage schedules” referenced by noble Lords today and in Committee will remain broadly the same as those that the UK has had under EU membership. I know that noble Lords have suspicious minds and I say “broadly” because the UK’s independent GPA schedules incorporate technical changes to reflect the fact that the UK is no longer an EU member state, and there are now successor government entities other than those listed in Annexes 1 to 3. I have provided more details of these changes in a written response to a question asked on this issue in Committee by the noble Lord, Lord Fox, which I am happy to outline to the House.

The UK’s independent coverage schedules were shared with the International Trade Committee in 2018, along with the text of the GPA and the schedules of other GPA parties. They were then laid before Parliament for scrutiny, in line with the Constitutional Reform and Governance Act, and were concluded without objection in 2019. Since then, Switzerland has agreed to implement the GPA, as revised in 2012. As such, to ensure appropriate parliamentary scrutiny and transparency, the new Swiss schedules were laid before Parliament in October 2020. So I hope noble Lords will agree that there has been ample opportunity to scrutinise the terms of the UK’s GPA accession.

With regard to the scrutiny of our future participation in the GPA as an independent party, I again reassure noble Lords that provisions under Clause 1 are limited to a very specific set of scenarios in the GPA. I stress that this does not include any broader renegotiation of the GPA or of the UK’s market access offer to the GPA.

In the short term, the powers are required to implement an update to the list of central government entities in Annexe 1 of the UK’s GPA schedule. The update will reflect the fact that many entities have merged, moved or changed name since the list was originally written. Given the limited nature of such changes, I believe it is not appropriate to apply the affirmative procedure to Clause 1. Moreover, it is important that these necessary regulations be made swiftly because, as I often find myself saying, if there are delays, the UK could be in breach of its obligations under international law. I draw noble Lords’ attention to the fact that the Delegated Powers and Regulatory Reform Committee of this House has twice considered the power in this clause and on neither occasion saw the need to comment on the use of the negative procedure.

As we are now reaching the end of Report, I will make some concluding remarks. I think that anybody who has witnessed the way our House has dealt with this Report stage can only admire the scrutiny noble Lords have given. That scrutiny has illustrated various aspects of the Bill which were not necessarily fully visible to people at the beginning, and it has drawn people’s attention to how important trade policy now is to the United Kingdom. The fact that the United Kingdom now has full control of its trade policy will lead in the years to come to some very positive developments, as we have already seen with the free trade agreements we are negotiating.

I very much thank noble Lords for the way they have approached Report stage. This is the first Bill that I have had the pleasure of taking through the House, other than our “son of Bill”, which we did before Christmas. I thank noble Lords for the way that they have assisted me and dealt with my inadequacies from time to time, no doubt, in the way that I have presented this Bill.

I thank your Lordships for the attention you have given to this Bill and I look forward to Third Reading. With that, I ask the noble Lord to withdraw his amendment.

[Lord Lennie (Lab) [V]]

I thank the noble Baroness, Lady Bennett, and the noble Lord, Lord Purvis, for their support for this amendment. I also thank the Minister for his honesty in pointing out our shortcomings in failing to take up these issues when we previously had the opportunity to do so; but that is another matter. I beg leave to withdraw the amendment.

Amendment 46 withdrawn.